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How to protect yourself from unscrupulous debt collectors

Many people in Michigan have accumulated more credit card debt than they can pay. Calls from debt collectors are both a familiar and unpleasant experience. Most collection agencies and their employees obey state and federal law in dealing with debtors, but some companies ignore these restrictions and cause individuals much unnecessary anguish.

The Fair Debt Collection Practices Act ("FDCPA") is a federal law, defining acceptable and unacceptable conduct for debt collectors. The act applies to family, personal and household debts, including medical debts, credit card debt, auto loan, and the mortgage on your house. The statute does not apply to business debts.

Debt collectors can only contact you between the hours of 8 a.m. and 9 p.m., and they cannot contact you at work without your consent. With the exception of your attorney (more on this below), a debt collector cannot discuss your debt with anyone else, including your employer.

The statute specifically prohibits debt collectors from using abusive language, threats of violence or harm and making false statements. A debt collector may not threaten legal action unless the law specifically allows them to take the threatened action. A common threat is garnishment of wages, but a garnishment cannot proceed unless the debt collector (or its client) has obtained legal judgment against you by winning a lawsuit. Also, federal benefits such as social security and veterans' benefits are exempt from garnishment.

One of the most effective protections from creditor harassment is to retain an attorney. The FDCPA expressly requires to deal only with a debtor's attorney if the debtor so chooses and provides the attorney's name, address and telephone number to the collector. A knowledgeable attorney can also negotiate a payment plan involving regular minimum payments. Also, a lawyer with experience in representing persons with credit card debt will immediately recognize practices that violate the FDCPA and know the proper remedy.

Source: Federal Trade Commission, "Debt Collection," accessed on Feb. 3, 2015

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