As Philadelphia bankruptcy lawyers we meet many clients who are being harassed by their creditors day and night. Creditor harassment is a major reason why many clients contact us in the first place.
Bankruptcy can put an immediate stop to bad creditor behavior through the power of the automatic stay. However, it’s also a good idea to learn your rights under both the federal Fair Debt Collection Practices Act (FDCPA) and the Pennsylvania’s Fair Credit Extension Uniformity Act (the PFCEUA). Both acts grant you certain options if debt collectors engage in bad behavior in the hopes of pressuring you to pay a debt. In some cases, it can be a potent weapon for shutting down creditor harassment, giving you what you need to develop breathing room for figuring out what you want to do.
In theory, debt collectors would know the laws and play by the rules. In practice, many debt collectors feel these laws tie their hands too much. Many will risk skirting the law or even violating it in the hopes you’ll be intimidated into coughing up a payment. Many also are all too willing to count on your ignorance to shield them from the consequences of their actions.
The FDCPA
The federal statute controls the behavior of debt collectors in the following ways:
- Collectors may only call between 8 am and 9 pm unless you agree to hear from them at other times.
- Debt collectors must make it clear that the communication they are initiating is an attempt to collect a debt. The specific warning is laid down by law: “This is an attempt to collect a debt, and any information we receive can and will be used only for that purpose.”
- Debt collectors must be honest about who they work for and why they are calling you. They may use a personal alias to protect their identity (debt collectors are regularly targets for violence), but they can’t lie about why they’re calling or where they’re from.
- If you contact a debt collector in writing to tell them to stop contacting you they must comply. It’s not a bad idea to invoke the FDCPA in your letter so they know you’re aware of your rights.
- You may also direct debt collectors to your attorney. If you do so, they must deal with your attorney from then on out.
- Debt collectors may only contact third parties like family members, friends, and employers to verify your name, address, phone number and place of employment. They may not discuss the debt with any third party. They also may not do anything to expose the nature of your debt to third parties, which means they can’t publish information about your debt publicly, they can’t send information about your debt in a post card, and they may not leave voice messages if they have reason to suggest a third party could hear the information.
- Debt collectors may not cash post-dated checks early.
Debt collectors absolutely may not threaten you with violence, harm, imprisonment or public humiliation. They also may not use obscene language or call you repeatedly with the express intention of harassing and annoying you. They may not make any false statements at all, and they may not threaten to take any action they don’t intend to take, including actions they’re legally prohibited from taking in the first place.
They also cannot collect new interest charges or fees.
The Pennsylvania Fair Credit Extension Uniformity Act
The PFCEUA extends the protections of the federal statute, expanding it to give consumers even more protections and power to recover damages, costs, and attorney’s fees. The PFCEUA even allows consumers to sue the original creditor for the debt collector’s bad practices.
Understanding the Differences Between Creditors and Debt Collectors
When exercising your rights under either fair debt collection statute it is vital to understand the difference between a debt collector and a creditor, as these laws only cover your interactions with third-party debt collectors.
The creditor is the original transactor of the debt. If you owe Discover card $9000, then Discover is the creditor. The debt collector is a third party contracted to recover all or some of that amount. If you get a call from “Smith and Smith Collections,” for example, that firm is a third-party collection agency. Smith and Smith would be bound by the fair credit laws, but Discover would not be. Thus, Discover may indulge in many (but not all) of the practices Smith and Smith would have to avoid.
Thus, you should avoid invoking FDCPA or the PFCEUA when dealing with original creditors, as the strategy could backfire.
You have rights if a debt collector violates the law.
You could, for example, be entitled to damages. But you’ll need a competent lawyer on your side. Contact Sadek Bankruptcy Law Offices today for your free consultation. We’ll be able to help you put together a winning strategy for dealing with your creditors, one that gives you your best chance at a fresh start.