Debt collectors can call, send letters to debtors, and can notify credit bureaus of the collection account for debt collection. Still, they are restricted by the Fair Debt Collections Practices Act.
FREMONT, CA: The Fair Debt Collections Practices Act limits debt collectors’ tactics. The FDCPA contains a list of rules that debt collectors must follow whenever they attempt to collect a defaulted debt. Debt collectors are one of the most complained about businesses and with good reason. Here are some things that debt collectors can do:
1. A Debt Collector Can Complain to the Credit Bureaus
The most common action taken by a debt collector is to report your collection account to the three major credit bureaus. If a collection account is added to the credit reports, the consequences can be severe. Collection accounts can remain on the credit reports for more than five years from the date of default of the original account. There are some side effects of this, such as higher insurance premiums, Denial of loan and credit card applications, difficulty getting hired if an employer performs a credit check, and many more.
2. Through Calls Or Writing
To collect debts, collection agents are hired and trained, especially. They will call and write to the debtor trying to persuade them to pay. They can even call debtors family or friends to locate them or to inform them to pay on time, sometimes they may call at the workplace also.
As per the guidelines of FDPCA, debt collectors cannot contact the debtors before 8 a.m. and after 9 p.m., and a debtor can also have the right to request (in writing) the debt collector to stop contacting altogether. But the other negative part is that if a debtor takes away a debt collector’s right to contact them, and then they can approach the court.
3. A Debt Collector Can Sue The Debtor
The other scariest thing a debt collector can do is to file a case in the court and make the court involved in the issue. If a debtor ignores a debt collector, they may resort to a lawsuit in an attempt to collect on your defaulted debt. If the debt collector sues and wins the trial, then the court will enter judgment against the debtor.
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