How the FDCPA Affects Your Debt Settlement

truth about debt settlement conceptDebtors who fall behind on their bills will inevitably receive one (or multiple) intimidating telephone calls from a collector. Collectors who work for collection agencies are typically paid in relation to the amount of delinquent debt they are able to recover from debtors. For example, a collector who gets debtors to pay a total of $50,000 in delinquent debt can expect to receive better compensation than a collector who is able to recover only $10,000. This prospect of financial reward encourages some collectors to engage in rude, obnoxious, and/or threatening behavior toward debtors. Such behaviors, in turn, would often pressure the debtor into filing for bankruptcy or taking other debt relief measures such as debt settlement.

The FDCPA and Your Rights

To protect debtors from the abusive practices of debt collectors, Congress passed the Fair Debt Collection Practices Act (FDCPA). This legislation makes it illegal for debt collectors in any state to engage in certain practices that were thought to be manipulative and unfair. Federal agencies enforce the FDCPA; in addition, debtors may file private lawsuits for violations of the FDCPA. Violations reported to a state’s attorney general may also lead to other consequences for the offending collector.
Some of the practices prohibited by the FDCPA include:

  • Contacting a debtor before 8:00 a.m. or after 9:00 p.m. local time;
  • Contacting a debtor after receiving written notification from the debtor indicating that the debtor will not pay the debt or does not wish to be contacted. After receiving this notification, the collector may contact the debtor to inform him or her that collection activities are ceasing or to inform the debtor that litigation against him or her has been filed.
  • Calling a debtor or third person repeatedly with the intent to annoy, abuse, or harass another person;
  • Contacting the debtor at his or her place of employment if the collector has been asked not to do so;
  • Contacting a debtor represented by an attorney;
  • Misrepresentation or engaging in deceit. This can occur if the collector states that he will have the debtor arrested and thrown in jail for refusing to pay the debt, or representing to the debtor that he is an attorney if he or she is not.
  • Using profanity or abusive language when speaking with someone about the debt.

How Does the FDCPA Impact Debt Settlement

Because of the FDCPA, debtors should not feel pressured to enter into a debt settlement plan or debt relief plan to stop a bullying collector. Debtors who feel their rights under the FDCPA have been violated can contact the Federal Trade Commission, the Consumer Financial Protection Bureau, and their state’s attorney general for assistance. The debtor may also contact a local consumer protection attorney to see if monetary damages are available.

Some debtors mistakenly believe that the FDCPA prevents a collector from contacting them once they have entered into a debt settlement program. While some debt settlement companies may try to stop calls from collectors while your debt settlement program is in place, collectors generally do not have to agree to stop contacting you (unless you send them a cease and desist letter).

When you hire the debt settlement lawyers at Instant Settle Consultants, PLLC, however, collection calls to you must stop once your creditor or collector is informed that we represent you. A collector who continues to contact you after being so notified is violating the FDCPA and may be liable to you for monetary damages. This protection allows you to carefully consider whether debt settlement is the right solution for you and, if it is, to work your debt settlement plan free from collector harassment.