Creditors have a right to collect an outstanding debt after determining and validating the accuracy of the amount owed. However, the debt collection process must be carried out within legal parameters. Based on the abundance of evidence of deceptive, unfair, and abusive practices by debt collectors, the Fair Debt Collection Practices Act (FDCPA) was enacted in March 1978 to protect debtors.
The FCPA sets the guidelines for debtors to challenge unfair payoff demands. Still, it’s vital to understand your rights under the Fair Debt Collection Practices Act and, most importantly, the ethical guidelines applicable to your situation.
Debts Covered by the FDCPA
Most debts acquired primarily for family, household purposes, and personal needs are covered by FDCPA. These also include medical, student loans, and credit card debts. However, this Act does not cover business debts. The regulation mainly applies to companies and people that collect debt regularly for others.
Debt collection agency employees, lawyers, law firms, and debt buyer agencies must also comply with the FDCPA. On the other hand, the Act does not cover creditors collecting their own debts, such as a hospital or in-house collections departments.
Moreover, while the Act prevents debt collection agencies and employees from contacting debtors before 8:00 a.m. and after 9:00 p.m., it does not prohibit debt collectors from calling you on weekends or holidays.
How Do You Recognize FDCPA Violation by A Debt Collector?
A common indicator of FDCPA violation by debt collectors is when they threaten, use misleading statements, abuse, and harass you to trick or coerce you into paying. Under this fair debt collection law, you can sue such collectors in federal court. The timeline for the suit is usually within one year from when the violation occurred.
It’s also a violation for a third-party debt collection agency and agents to contact debtors directly if counsel represents them.
Generally, the FDCPA:
- Creates a debt validation procedure using a model form notifying the debtor of a debt
- Establishes limitations for collection agencies’ acquisition of location data and communications regarding a debt
- Stipulates requirements for sending necessary disclosures
- Demands record retention
- Prevents abuse, harassment, untrue and misleading representation, including unfair activities
Understanding that your FDCPA dispute rights are a powerful tool is vital. Once you dispute the debt, the debt collector must stop all debt collection activities until it proves that you owe the debt. If the debt collector can’t provide you with that proof, it will never bother you again. However, when a debt collector provides evidence of the debt, you can decide what to do about it.
Still, to avoid unfavorable incidences with collection agencies, a debt management plan can help you repay any outstanding money owed to creditors, such as credit card debts. You can consider debt relief to reduce the overwhelming amounts.
For instance, obtaining credit card relief removes most repayment burdens and lowers your chances of getting into trouble with debt collectors.
How Does Credit Card Debt Relief Work?
Generally, credit card relief allows you to pay a significant portion of your outstanding balance. It may also include credit card debt settlement. This involves debt relief companies that are for-profit establishments that negotiate on your behalf with your creditors at a fee.
Debt relief changes the terms and amounts you owe, effectively helping you manage your available finances. This tool may include clearing the debt, adjusting your interest rates and payment schedule, reducing your repayments, or convincing your creditors to accept a lesser amount or new terms usually favorable to you.
While it’s important to consider how this tool works, knowing some essential truths about credit card debt relief is equally necessary.
The essential Truths about Credit Card Debt Relief
Understanding the essential truths about credit card debt relief will help you make better and more informed choices. Credit card relief programs and other provisions present reliable and legal ways to lower your debt but are not always the right solutions for everyone.
Nevertheless, to seek debt relief, consider debt settlement, bankruptcy, debt management, and consolidation. In addition, consider a debt relief program if your unpaid unsecured amount is equal to or surpasses your gross income or you have no way of repaying.
The prospects of being relieved from high credit card debt may be an excellent solution to your burden but consider these truths,
Debt Relief through Bankruptcy and Debt settlement Affects Your Credit
Credit card relief helps you manage your overwhelming debts, and while the FDCPA protects you, this tool or program will affect your credit score for several years. This is because whenever you have a significant unpaid outstanding debt according to the original agreement may stand out before other lenders.
Before considering these avenues think about the duration of the consequences that follow.
It Affects Your Federal Income Taxes
When you receive credit card relief, the IRS will likely consider the forgiven debt as income and tax you.
It May Cost You Money
When seeking credit card relief that involves debt relief settlement companies, you will likely pay fees and interest since for-profit companies provide most programs. Likewise, if you declare bankruptcy as a credit card relief strategy, you must cover court fees, counselors, and even charges for nonprofit companies that help you.
Normally, a suitable credit card relief program is determined by the debt amount, missed payments, and the owner. However, if you don’t qualify for credit card relief and want to prevent or fight back against fair debt collection violations such as harassment, follow these steps.
Step One: Retain Debt Collectors Call Log
Make sure you record all the names, phone numbers, employers, agents, and notes of what you believe was a violation of the FDCPA. Also, ensure you write the date and time to help you track the people calling you and the frequency.
Step Two: Record Phone Calls
While you may have a call log, a debt collector may lie about the incident, so it’s critical to record phone call conversions for proof. Ensure the recording is clear.
Step Three: File A Complaint
After gathering all the vital evidence, file a complaint with the appropriate and registered legal agencies and authorities that handle such matters.
Step Four: Go to An Attorney
Seek the guidance of an attorney experienced in handling fair debt collection violations.
Generally, your rights under the Fair Debt Collection Practices Act may not offer debt relief, but they protect consumers from unfair, manipulative, and potentially abusive behaviors by debt collectors.