Does this sound familiar? It’s late at night—you’re relaxing, watching a little Netflix. And the phone rings. You don’t recognize the number, but you figure a call at 10:00 p.m. has to be an emergency, so you pick it up. It’s a debt collector. What do you do?
Unbeknownst to most people, that caller just violated your rights. By law, they can only attempt to reach you between the hours of 8:00 a.m. and 9:00 p.m. in your time zone. Don’t buy into that “It’s 5:00 somewhere” excuse—that’s for drinking, not debt collecting. Collection agencies try it all the time.
Here’s what you should do: Hang up the phone. Find a debt consolidation loan to pay off what you owe (this can wait until morning). Or call the creditor directly to make a payment arrangement. Let them know about the violation of your rights and you might get a few dollars shaved off your bill.
Wage garnishment is usually an empty threat
Debt collectors get paid for instilling fear into debtors. By the time an account reaches their desk, it’s several months in arrears, so they assume you won’t be open to rational negotiations. Instead, they resort to threats. The most common of these is wage garnishment.
Collection agencies cannot garnish your wages. Read that again. They can’t do it. Wage garnishment has to be ordered by a judge after a court hearing that you have a right to represent yourself in. Even threatening to do it is illegal unless the collector is an attorney.
Exceptions to this rule are student loans and taxes, but you won’t normally get a phone call for either of those. The government simply takes your money, usually after a few notices, but most of us ignore those. Try to stay current on taxes owed and student loans to avoid this.
Harassing neighbors and employers is not okay
The “ignore” button on your phone can be your best friend when you’re deep in debt, but your employer or even your neighbors may pay a price when you use it too often. Aggressive debt collectors will call them, usually to embarrass you into calling them back.
This tactic isn’t legal either, but the collector will usually disguise it with a plausible excuse about checking references or using words like “important legal matter.” They’re not allowed to discuss details, but they will push the envelope as far as they can.
No one wants to be in this situation. It’s embarrassing and could even cost you your job. The best option for you is to face the challenge head on. Call the collector, make a payment arrangement, or simply tell them to stop calling and take you to court.
Get it in writing if you make a payment arrangement
If you do make a payment arrangement of some kind, get it in writing. They’ll ask for your bank account numbers and will clean you out if you don’t have an ironclad written agreement. It’s an all-too-common story. Sadly, you’ll have no legal recourse if the debt was valid.
Most debt collectors get paid on a commission or bonus system that gives them incentive to use any means necessary to get you to pay. Unscrupulous agencies skirt the lines of legality all the time. Don’t tolerate it. As a debtor, you have rights. Exercise them.
Read the Fair Debt Collection Practices Act (FDCPA). It was created by the Federal Trade Commission (FTC) and has been in effect since September 20, 1977. It clearly outlines your rights and tells you how to lodge a complaint. That will stop those late-night phone calls, so you can get back to enjoying your latest binge obsession.