If debt collectors are calling you it is stressful. It is a good idea to know what they can and can’t do when they call you. These days more and more people do have bad debt. You are not alone. In turn, more and more unscrupulous debt collection agency’s are trying to collect on that debt.
In California, debt collectors can be one of two things: (1) a collection agency, which is a third party collector (“third” because you are the first and the lender is the second) or (2) the original lender or a “successor”, like when a mortgage moves from one servicer to another. Under FEDERAL debt collector law, only THIRD PARTY collectors are regulated, by the Federal Fair Debt Collection Practices Act. Under California debt collector law (the Rosenthal Act), regulation extends to even the original lender. To keep things from getting confused, we’ll stick with federal law unless I specify otherwise in this blog.
I spent my first two years of law school working part-time at a collection agency. I know how this game is played. I know what the rules are.
What Debt Collectors Must Not Do:
Debt collectors from collection agencies cannot do any of the following:
- Call you repeatedly or contact you at an unreasonable time (the law presumes that before 8 a.m. or after 9 p.m. is unreasonable).
- Place telephone calls to you without identifying themselves as bill collectors.
- Contact you at work if your employer prohibits it.
- Use obscene or profane language.
- Use or threaten to use violence.
- Claim you owe more than you do.
- Claim to be attorneys if they’re not.
- Claim that you’ll be imprisoned or your property will be seized.
- Send you a paper that resembles a legal document.
- Add unauthorized interest, fees, or charges.
- Contact third parties, other than your attorney, a credit reporting bureau, or the original creditor, except for the limited purpose of finding information about your whereabouts. Unless you have asked collectors in writing to stop contacting you, they can also contact your spouse, your parents (if you are a minor), and your co-debtors.
- Continue to contact you after you’ve told them – even just orally on the phone – not to contact you further.
What is the solution :
Well, the easiest one is to tell them to stop.You know what the rules are. Remind them. Sometimes that is all you need. Secondarily start taking notes on when they called and what they said. Make sure you get the name (probably a fictitious name, but even those must be registered with the California Department of Consumer Affairs.) Better yet, record the call. Hey, they’ve already told you that “This call may be recorded for…purposes”, right? If you want to be extra careful (‘cuz recording a telephone conversation without the other person’s consent is a crime) you might just add, “Oh, yes it might.”
If the collector doesn’t comply, demand in writing that they stop calling (and writing.) Then report the collector to the Department of Consumer Affairs. If you want to ratchet up the pressure, call your debt collector law attorney and sic him on the collector.
This may be just a short term solution, because not all debt collector law is written to protect the person who owes money. Alas, the collector can still do stuff other than contact you. And sometimes – I think seldom, but sometimes – the creditor takes their cue to file a lawsuit from whatever resistance they’re getting from the borrower. Meaning, if you order the collector to call off its dogs – i.e. to stop contacting you – the creditor may just raise the stakes itself by filing a lawsuit.
Bankruptcy offers a permanent and certain end to the creditor’s right to do anything to collect money from a borrower. For the creditor, it’s “Game Over.”
One of the immediate benefits of filing any type of bankruptcy action is that you no longer have to deal directly with your creditors. However, it may take some time for your creditors to get the word that you have filed for bankruptcy. There are a couple of ways you can get the collection calls to stop immediately after your attorney files your petition.
You can choose to be proactive and notify each of your creditors that you have filed for bankruptcy. Provide them with the contact information for your attorney, and ask that they direct any questions or concerns directly to your legal counsel. Your attorney will handle any necessary communication with the creditors, at least until the court has approved your petition. You may even arrange for your attorney to contact the creditors after you have retained. If you take this route, make sure you have provided the attorney with all the names and addresses of the creditors.
You may also choose to respond to any telephone calls from your creditors by verbally informing them of your actions when they call. As with the written notification, be prepared to provide the collection agent with your attorney’s contact information. By law, once the creditor is informed verbally or in written form that you have entered a bankruptcy petition, there is to be no further direct contact with you.
Should a creditor choose to continue contacting you directly, report the telephone calls to your attorney. He or she can take the appropriate action to stop the calls immediately. This may mean your attorney will file a motion or proceeding in Court to have the creditor punished for its misbehavior, but often the issue is resolved informally.
Creditor harassment is serious. Let us know if it’s a problem for you. We can help stop it.