Debtors’ Rights: Some General Information About Dealing With Creditors

One of the most stressful situations in life is dealing with creditors and debt collectors who are demanding payment for money that is owed.  It is even more stressful when you owe money to several creditors.  Stress and frustration results when you borrow money from a person or entity and you do not or cannot honor your financial obligations.  

            You are called a “debtor” if you owe money to an individual or a corporate entity.  The “creditor” is the individual or corporate entity that you owe.  The creditor may sue you and attempt to collect what is owed if there is a judgment against you. However, debtors have rights.  Collection activity is regulated by both the state and federal government. Collectors are not allowed to harass you by engaging in unlawful practices such as the following:

·                   Calling at hours that are defined as unreasonable under state law.

  • Threatening violence.
  • Threatening criminal prosecution, unless the debtor has violated a criminal statute.
  • Threatening to tell your employer and neighbors.
  • Using intimidating, abusive, and offensive language.

         If you believe your rights have been violated, contact an attorney immediately.  You should hire a professional with legal training if you want to be successful in an unfair debt collection practice claim.  Now, this does not mean that the creditor cannot sue you.  It deals with the unlawful collection activity and not the debt that you may owe.

          Before the creditor or collection agency files a Complaint against you, they will typically contact you by telephone and in writing in order to get you to pay.  Any written notice from them should contain the following:

  • The name and address of the collection agency.
  • The amount of the debt, stating the original debt and a breakdown of other costs or interest.
  • The name of the creditor to whom the debt is owed.
  • The collection agency’s account or file number and the creditor’s account number, if that is the case.
  • A statement that unless you dispute the debt within a certain time after you receive the notice, the creditor or collection agency will assume the debt is valid.
  • A statement that, if requested within a certain time, the collector will provide the name of the original creditor, if different from the collector.
  • A statement that if you dispute the debt, the creditor or collection agency will get verification of the debt and mail it to you.  

          If you do not believe that you are responsible for the debt, you should dispute it in writing.  Some defenses include: 1) the debt has already been paid; 2) a third-party was responsible for paying the debt and you have proof; 3) it is not your debt; 4) the statute of limitations defense; and 5) the amount is incorrect because of a computational error.  

          If a civil lawsuit has been filed against you by the creditor or collection agency, consider hiring a lawyer.   Once you have received the Summons and Complaint, it is important for you to respond within the time specified on the Summons.  Should you fail to respond appropriately it is likely that judgment will be entered against you followed by post-judgment collection process proceedings to include garnishing the debtor’s bank account, wages, seizing the debtor’s personal property or real estate, serving the debtor with written discovery to locate assets, and even holding the debtor in contempt for any failure to comply with court orders.     

          A lawyer can help you protect certain kinds of property from being taken to collect a debt.  A lawyer can advise you on whether Bankruptcy may be a good option.  Let a trained legal professional in your area represent you so you can get on with the rest of your life.