ILLEGAL DEBT COLLECTION PRACTICES
A Common Type of Illegal Debt
Collection Practice is Dunning.
Dunning is the creditor’s practice of trying
to encourage the debtor to pay back debts.
This practice is entirely legal, except when
Calls the debtor at home more than two times
in each 7-day period or at any other place
in each 30-day period for each debt.
Calls the debtor and does not identify
himself or that he is calling on behalf of
Sends collection notices to the debtors that
openly indicate/imply that the person is in
Tells anyone about the debt in hopes of
intimidating the debtor into paying.
Contacts the debtor directly when the
creditor has been notified to communicate
only with the debtor’s attorney.
Calls the debtor outside of normal waking
hours (approximately 8am to 9pm).
Causes the debtor to be charged for long
distance phone calls.
Falsely threatens to take legal action.
Threatens to use violence.
Uses obscene language.
can protect you against the following Unfair
Dunning Debt Collection Practices:
Abusive language and
threats of legal action
neighbors, relatives, friends,
coworkers, and employers
Deceptive and illegal
methods of debt collection
Misrepresentation of the
amount or status of a debt
Disclosure of your
default debts to third parties
If you have been the victim or are the victim of
any of the above in illegal dunning
please contact us today for a
HOW TO FIGHT BACK AGAINST UNFAIR DEBT
Know Your Legal
The Federal Fair Debt
Collection Practices Act, a United States
statute enacted in 1978, seeks to eliminate
abusive and harassing behaviors that debt
and collection agencies often engage in. The
FDCPA states specific practices and rules
under which debt collectors can and cannot
operate, and offer specific penalties for
agencies found breaking this law.
The following is a
summary of your rights.
Creditor or Debt Collector Cannot:
Discuss your debt with
third parties, such as friends or
neighbors without your direct prior
consent or judicial authority.
Represent or imply they
are affiliated with the federal
government or any state or distribute
any document which simulates or falsely
represents that it is authorized by any
court or government agency.
Use or threat to use
violence or criminal means to cause
physical harm, or harm to your
reputation or property.
Collection agencies may not communicate with
a debtor during an inconvenient time or
place. The FDCPA states that only
appropriate times to contact the debtor are
between 8 a.m. and 9 p.m.
If a debtor has legal representation, the
collection agency cannot directly contact
him or her directly.
A debt collection agency is forbidden to
harass a debtor. This includes threatening
violence or any other criminal action that
could harm the consumer's body, property, or
reputation. In addition, agencies may not
use offensive or crude language, or report a
debtor to anyone other than credit bureaus
or the court system.
Request verification of a
disputed debt in writing.
Create a paper trail by
keeping a record of the date, time and
name of the individual contacting you
and putting all of your requests and
responses in writing. Plan to repay any
undisputed obligation and determine a
payment plan you can maintain and
provide that to the creditor or debt
collector in writing.
Check the licensing
status or Bar status of a debt
collector/attorney which contacts you.
Attend any scheduled
court proceeding including Small Claims
Court so you do not lose by default.
Assert your rights in
court to ensure that the Court does not
order you to make payment from exempt
Creditor or Debt Collector Must:
Tell you the amount of
the debt and the name of the creditor to
whom it is owed at the initial
communication or within five days of the
Disclose in the initial
communication that they are attempting
to collect a debt and that any
information obtained will be used for
Disclose the name of the
creditor or debt Collection Company and
the name of the individual collector
making the contact.
Inform you of the name
and address of the original creditor if
you request that information in writing
within thirty days of the initial
Communicate directly with
your attorney if you provide such
information to the creditor or debt
Notify you in writing
within thirty days of the initial
contact of your right to not have
collection telephone calls made to your
place of work.
Creditor or Debt Collector Can:
Assume a debt is valid if
it is not disputed within thirty days of
contacting the consumer.
Contact any person,
including family and friends, for the
sole purpose or acquiring information on
where you live or how to contact you.
Call you at home and come
to your residence during normal working
hours which are from 8:00 A.M. to 9:00
P.M., but only twice in any seven day
Collect expenses in
excess of the amount owed, such as fees
or interest, if such charges are
expressly authorized by the agreement or
permitted by law.
What types of debts are covered
under the FDCPA?
A: The Act covers personal, family, and
household debts, including money you owe on
a personal credit card account, an
auto loan, a medical bill, and your
mortgage. The FDCPA doesn’t cover debts you
incurred to run a business.
How can I stop a debt collector from
A: If a collector contacts you about a debt, you may want to
talk to them at least once to see if you can
resolve the matter – even if you don’t think
you owe the debt, can’t repay it
immediately, or think that the collector is
contacting you by mistake. If you decide
after contacting the debt collector that you
don’t want the collector to contact you
again, tell the collector – in writing – to
stop contacting you. Here’s how to do that:
Make a copy of your letter. Send the original by certified
mail, and pay for a “return receipt” so
you’ll be able to document what the
collector received. Once the collector
receives your letter, they may not contact
you again, with two exceptions: a collector
can contact you to tell you there will be no
further contact or to let you know that they
or the creditor intend to take a specific
action, like filing a lawsuit. Sending such
a letter to a debt collector you owe money
to does not get rid of the debt, but it
should stop the contact. The creditor or the
debt collector still can sue you to collect
Is there a statute of limitations on billing
for bad debts?
There is no statute of
limitations on billing for bad debts, but
there are statutes of limitations for filing
lawsuits and for reporting the debts to the
credit reporting agencies. Although these do
vary depending upon the type of debt, in
general there is a six year statute of
limitations for filing a lawsuit to collect
upon a debt, and a seven year statute for
reporting bad credit. It is rarely a good
idea to decide not to pay a good debt if you
are relying wholly on the statute of
limitations, because there are more
complicated issues involved, including when
these may be tolled, or extended, or even
when the statutory period has begun to run.
But for your question, even if the statute
of limitations has run, as long as a
collector follows the debt collection rules
and is not harassing you, they may continue
to make reasonable collection efforts, short
of going to court.
A creditor of mine just threatened to
garnish my wages. Can they do that?
A: That depends. Collectors are
generally not allowed to threaten to garnish
your wages unless they inform you that a
court order is needed to take this action.
However, there are some exceptions to this
rule. For example, if the debt you owe is to
a government agency, most likely a student
loan guarantor, a court order may not be
necessary. Either way, you would be entitled
to receive 30 days' notice prior to any
order to your employer to garnish your
wages, and you must have an opportunity for
a hearing concerning the existence of, or
the amount of, the debt.
TYPES OF ILLEGAL DEBT COLLECTION WE HANDLE
Ignoring credit card debt will not make the
situation go away and the results will
follow you for years. Ideally, it's best to
work out a payment plan with your creditors
to pay off the debt. However, if you default
on credit card debt, it will affect your
credit, overall debt and you may even end up
with a lawsuit.
The initial impact of defaulting on a credit
card is late payment fees and interest rate
hikes. Late fees will continue to grow and
will be applied to your balance as long as
the account is open. The late fees combined
with higher interest rates results in
soaring monthly payments and further debt.
Unfortunately, individuals who were unable
to make the minimum payment due before
defaulting find themselves in a worse
financial situation after the fact. As of
February 22, 2010, your interest rate will
only go up if you are more than 60 days late
on your payment.
Creditors and Collections
If you're only a few days or weeks late, the
creditor will try to contact you by phone
and possibly by mail. If you are unable to
make payments, or a payment plan cannot be
reached within a reasonable amount of time
(usually three to six months), the creditor
will refer the account to an outside debt
collection agency and close the account. A
debt collection agency will try to get as
much of the debt owed and may work out a
payment plan with you.
If your account is seriously delinquent or
you cannot work out a payment plan with your
creditors, the credit card company or a
collection agency may bring a lawsuit
against you. If a judgment is brought
against you in court, your wages may be
garnished or a property lien may be ordered.
• The case of your defaulted credit card
loan may be handed over to a collection
• The collection agency will be entrusted
with a responsibility to collect the credit
• You will be charged the cost associated
with the collection of your credit card
• You will be liable to pay court costs and
attorney fees other than collection fees
• You can be dragged to court in case of
your defaulted credit card
• The amount that your wages is garnished
with may be limited by Federal law
• Your may face the interception of your
state and federal
income tax refunds
• Part of your Social Security benefit
payments may be withheld by the Federal
• The defaulted credit card will negatively
affect your credit record and make you
suffer its detrimental
• You will find it difficult to obtain a
mortgage loan, an
auto loan and even credit cards
• You will be denied deferments, federal
interest benefits and renewal of your
If you as the debtor believe
that there is an error on your credit
statement, or you otherwise wish to dispute
information on your credit card bill, you
have 60 days to send the creditor a written
This written notice must include:
Your name and account number.
Your belief that the statement contains a
The amount of the error
The reasons you believe that the statement
contains a billing error
While you do not have to pay the disputed
amount on the bill, you do have to pay any
undisputed amount on the bill.
The creditor has 30 days to send a written
acknowledgement of your dispute, and may not
take action to collect the disputed amount
or close your account in the meanwhile. The
creditor has two complete billing cycles
after the receipt of your written notice to
investigate your dispute and send you a
written response, either correcting the bill
and crediting your account, or explaining to
you why there is no error in the bill.
If the creditor determines that there is no
mistake in the bill, you may request copies
of the creditor's documentary evidence of
the debt, e.g., a copy of a signed charge
slip for a purchase you do not believe you
made. If you claim that you have been billed
for goods that were not delivered, the
creditor must determine that the goods
actually were delivered, and provide you
with a written statement to that effect.
Once the creditor has investigated your
claim of a billing error and notified you of
its belief that you still owe all or part of
the disputed amount, it has no further
obligation to investigate. The creditor must
notify you of the amount of time you have to
pay the amount due without incurring further
If you notify a creditor that you believe
there are billing errors in your statement,
the creditor may neither report nor threaten
to report your failure to pay the disputed
amount to any credit reporting agency until
the creditor has investigated your claim of
a billing error and notified you of the
amount of time you have to pay the amount
due before incurring further charges. If you
still do not pay the bill, the creditor may
report you to a credit reporting agency, but
must inform you of the agency to which it
has sent this information. Also, if you
continue to dispute the bill, the creditor
must report that fact to the agency, and
must correct any information given to the
agency if the bill is subsequently resolved.
If you lose your card, or it is stolen, and
someone makes use of your credit card number
without your permission, you will owe $50 or
the actual amount the unauthorized person
has spent with it prior to your alerting
your credit card issuer, whichever is less.
If you have authorized someone to use your
card in the past, you may not be able to
convince your credit card company that the
person no longer has permission to use the
Dealing with a debt collector can be one of
life's most stressful experiences. Harassing
calls, threats, and use of obscene language
can drive you to the edge. What's worse, a
collector may embarrass you by contacting
your employer, family or neighbors. You may
even be hounded to pay a debt that is not
rightfully yours. Sure, collection agencies
have a job to do.
rights. Learn to recognize abusive medical
collection practices. Even if you owe a
medical debt, a collector owes you fair
treatment and respect for your privacy.
Also, be aware that even if the collector's
conduct does not exactly match the language
of the federal Fair Debt Collection
Practices Act, that collector may still be
liable for its conduct. We explain your
rights under federal and state laws.
first contact with a medical debt collector
is by telephone, tell the caller that you
want all future contact in writing rather
phone. You can also instruct the
collector not to call you at work or at all
if that is your choice.
Start and keep a file. At the first
contact from a collection agency, start a
file. Your file should include dates and
times of phone conversations, pre-recorded
messages the collector leaves on your voice
mail, and when you send or receive
correspondence, notes of conversations along
with the name of the collection agency
employee. Copies of correspondence you send,
as well as those you receive including
envelopes. Collectors are supposed to give
you written notice of the collection action
five days after you are contacted by phone.
Copies of messages those are abusive or
An auto loan default can have a significant
impact on your credit score and your overall
credit history. An auto loan is a type of
installment credit. And while a successful
payment history can help boost your credit
history, even a few late payments -- let
alone a default or repossession -- can make
for a major negative mark on your credit
of defaulting on an auto loan, which can
lower your credit score by over 100 points,
may lower your credit score below prime (a
FICO score of over 700), or may even lower
your credit score to a subprime level (often
viewed as below a FICO score of 550).
Therefore, your auto loan default will make
it more difficult to receive other types of
revolving and installment credit, such as
mortgages, credit cards, home equity loans,
and the like. Some landlords even consider
credit scores, and are
apprehensive about leasing to individuals
with credit scores under 600.
An auto loan default will also make it difficult to secure
financing for another new or pre-owned
vehicle. The lender with whom you defaulted
will not be likely to extend further credit,
and today's stricter underwriting guidelines
mean that it will be very difficult to
obtain financing without a significant down
payment. Your auto loan default could also
leave you without a vehicle altogether if it
is repossessed. While many lenders will wait
until an account is over six months
delinquent, your finance contact may state
that repossession could occur when the bill
is just ten days late. Although this is
unlikely, it is always a possibility.
Creditors are not
simply going to ignore your utility debts.
They will eventually come back to haunt you
one day. Firstly, your account will fall 30
days past due. This is not too much of a
problem. You will get charged a late fee and
you might get a courtesy call from your bank
reminding you to pay your bill. You will
also notice a little ding on your credit
report. Depending on the bank, your
account also might see a dramatic spike in
the interest rate. If you continue not to
pay your bill, your account will fall
further into delinquency. This means that
you account will be about 60 days past due.
This definitely shows up on
your credit score
and it will have an even bigger ding in it.
You will be charged more late fees and your
interest rate, if it hasn’t already gone up,
is going to definitely rise. You will be
getting more and more calls from your bank
asking you why you are not paying.
If you continue to ignore your utility bill
your account will fall into 90 days and then
120 days delinquency. It is in these stages
where your bank is really going to try to
get you to pay. They will stop asking you
for the full amount and they will try to get
you to pay just a little bit. You will get
charged even more late fees and more
interest. You should know the banks numbers
by heart on your caller ID by now and your
mailbox and email inbox are probably
programs of re-payment.
Continuing to ignore your utility bill will
your account into pre-charge off. This
means that your bank is likely going to
start offering you settlements. If you pay
%50 of the total balance, the bank will
forgive the rest. More late fees and more
interest will accrue, adding to the total
balance due. It will surprise you how
quickly the balance amount will rise. From
here your account will be sent to an outside
collection agency. Outside agencies are not
nearly as nice as your bank. They will call
multiple times a day, even if you order them
to cease calling. You might even see a
representative showing up at your door.
The last stage is where your lender gives
up. They will stop asking you to repay your
utility debt. There will be no more phone
calls, no more letters, no more offers of
settlements. Everything will stop. That is,
until you see a notice that they have put a
lien on your house. After you sell your
house or die, the proceeds of your mortgage
will go to pay for the bill you ignored for
so long and you will receive the remaining
amount, if any.
DID YOU KNOW…
April 7, 2011 expanded consumer protections
will go into effect which significantly
increase the money and personal property
which is out of the reach of a creditor
seeking to satisfy a court judgment.
What this means for you…
creditor is unable to seize certain funds
and property covered by the law to satisfy
an outstanding debt. In addition, the
revised law puts other protections into
place for consumers who are over sixty years
of age or consumers who are handicapped.
These protections ensure that financially
distressed Massachusetts residents are able
to maintain the basic necessities of life.
Examples of personal items exempted:
An automobile up to
$7,500 of wholesale resale value, this
exemption rises to $15,000 for a
handicapped person or a person age 60+
Cash, savings or other
deposits in a bank account of up to
Household furniture up to
$15,000 in value
Wages equal to 85% if the
debtor's gross wages or 50 times the
hourly minimum wage per week, whichever
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To request a consultation please call our
office at: (413) 737 1200