FDCPA Laws to Know Before Filing For Bankruptcy

A person facing financial hardship does not have to resort to filing for bankruptcy. There may be instances where a debtor can pay their bills through disciplined budgeting and even talking the matter over with some creditors. Unfortunately, some creditors may use unconscionable behavior in order to get payment. Thus, if someone wants to handle the situation with their creditors without bankruptcy, they should be aware of the protections afforded to them under the Fair Debt Collection Practices Act (“FDCPA”).

The Scope of the FDCPA

The FDCPA encompasses only certain kinds of debts and debt collectors. For instance, the FDCPA applies only to consumer debts, which are transactions “in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family of household purposes.” Thus, commercial debts (i.e. loans for business real estate or inventory) are not covered by the FDCPA. Likewise, the FDCPA defines a debt collector as one who collects debts for a living. A creditor trying to collect on their own debts is not subject to the FDCPA.

Limitations on Debt Collector Behavior

FDCPA laws address how a debt collector may contact people. The FDCPA prohibits contact at a time or place that a person would reasonably know to be inconvenient. Contact before 8:00AM and after 9:00PM is presumed to be unreasonable. Likewise, a debt collector cannot contact the debtor at work if they know (or should know) that the employer does not allow such communication. Moreover, if the debtor refuses to pay or sends a written communication requesting that all contact efforts stop, then the debt collector must comply. But the cessation of contact does not end the debt, it just means that any further communication will come in the form of legal action. In a related manner, although a debt collector can contact third parties, they can only do so for getting contact information, and cannot discuss the matter with other people.

Furthermore, first contacting a debtor, the debt collector must provide

• the amount of the debt;
• the identity of the creditor;
• the debtor’s right to contest the amount of the debt or the debt itself, and;
• if the debt is contested, the debtor collector requirement to get verification.

Get a Lawyer If You Need Legal Help

Although a person can address problems sending a letter to an offending debt collector, violations of FDCPA laws can be best handled via quality legal representation. Once a debtor has obtained an attorney, all future contact goes to that attorney. Likewise, if a debt collector’s violation of the FDCPA has caused someone significant harm (loss of employment, health issues, etc.), then an attorney can possibly get compensation for their client and even a court order curtailing the debtor’s conduct.