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FAQ'S

Tuesday, September 13th, 2005

by Theodore Sliwinski, Esq.

Covered in this Article:

• Collection agencies have been calling me all hours of the day and night. Can I get them to stop contacting me?
• I am getting calls from the collections department of a local merchant I did business with. Can I tell that collector to stop contacting me?
• A bill collector insisted that I wire the money I owe through Western Union. Am I required to do so?
• Can a collection agency add interest to my debt?
• A collection agency sued me and won. What collection measures can it now take against me?
• Can a creditor continue to contact a debtor after they have filed for bankruptcy?

1. Collection agencies have been calling me all hours of the day and night. Can I get them to stop contacting me?

It is against federal law for a bill collector who works for a collection agency to call you at an unreasonable time. The law presumes that calls before 8 a.m. or after 9 p.m. are unreasonable. But other hours may be unreasonable too, such as daytime hours for a person who works nights. The law entitled the  Fair Debt Collection Practices Act (FDCPA), also bars collectors from calling you at work, harassing you, using abusive language, making false or misleading statements, adding unauthorized charges, and many other practices.

Under the FDCPA, a debtor can demand that the collection agency stop contacting you, except to tell you that collection efforts have ended or that the creditor or collection agency will sue you. You must put your request in writing. It is suggested that the debtor send a certified letter to the creditor to advise them to cease contact as per the FDCPA.

2. I am getting calls from the collections department of a local merchant I did business with. Can I tell that collector to stop contacting me?

No, the FDCPA applies only to bill collectors who work for collection agencies. While many states have laws prohibiting all debt collectors from harassing, abusing or threatening you, most of these laws don’t give you the right to demand that the collector stop contacting you.

3. A bill collector insisted that I wire the money I owe through Western Union. Am I required to do so?

No, and it could add more money to your debt if you did do it. Many collectors, especially when a debt is more than 90-days past due, will suggest several “urgency payment” options, including:

• Sending money by express or overnight mail. This will add at least $10 to your bill; a first class stamp is fine.
• Wiring money through Western Union’s Quick Collect or American Express’ Moneygram. This is another $10 wasted.
• Putting your payment on a credit card not charged to its maximum. You’ll never get out of debt if you do this.

4. Can a collection agency also add interest to my debt?

Yes, the FDCPA allows a collector to add interest if your original agreement calls for the addition of interest during collection proceedings or the addition of such interest is allowed under state law.

5. A collection agency sued me and obtained a judgment against me. What are the next steps that the collection agency will take?

Before obtaining a court judgment, a bill collector generally has only one way of getting paid: demand payment. This is accomplished with harassing phone calls and demand letters. However, once the collector or creditor sues you and obtains a judgment, then the law allows it to take further steps to collect the debt. If you have a job, the collector may try to garnish up to 10% of your net wages. The creditor may also try to seize bank or other deposit accounts you have any. If you own real property, the creditor may record a lien against it, which will have to be paid when you sell or refinance your property. Even if you are not currently working or have no property, then the judgment won’t disappear. In New Jersey any, filed court judgments can last up to 20 years, and the judgment can be renewed for many years beyond that.

6. Can a creditor continue to contact a debtor after it he has filed for bankruptcy?

During the time the debtor is working out a plan or the trustee is gathering and preparing the assets to sell, the bankruptcy code dictates that creditors must stop all collection efforts against the debtor. As soon as the bankruptcy petition is stamped “Relief Ordered” upon filing, the debtor is immediately protected from your creditors.

If a creditor continues to attempt to collect a debt, then you should immediately notify the creditor in writing that you have filed bankruptcy, and provide them with either the case name number and filing date, or a copy of the petition that shows it was filed. If the creditor still continues to collect, the debtor may be entitled to take legal action against the creditor.

Always be reasonable with the creditors. Don’t be rude to them. They were kind enough to provide the service or let you use the credit card. Send them a copy of the discharge to remind them that the debt has been discharged. If they keep hounding you, then send it to them by certified mail. This will make an impression on them, and the correspondences will then most likely stop.