1. Home
2. Bankruptcy Articles
3. A Debtor’s Rights Guide

FAQ'S

A Debtor’s Rights Guide

1. What is the culture of the debt collection industry?

If your experience with a debt collector has been a positive one, then you are the one of the more fortunate ones. For the majority, most of my client’s experiences have led them here seeking hope and a way out of the harassment. Yes, if you owe a debt, then the collector has the right to collect that debt but at what cost? In more cases then you could imagine, the debtor does not have legal grounds to try to legally collect your debt. If the debt is charged off by the original creditor and if it shows up “charged off” on your credit report then you do not owe the debt collector one cent. Many consumers’ have suffered severe health and emotional problems after dealing with some debt collectors who find pleasure in the chase and consumer intimidation of collecting a debt.

Most of these debt collectors are third-party debt collectors. Some of these debt collectors are not internal debt collectors who work at banks or at loan companies. Instead they are third-party debt collectors and they work for collection agencies. It is their job to get results, and it is certainly a very tough job in these rough economic times. A collector at a bank or loan company works for salary and does not live on commission. Their job descriptions are very broad and it involves customer service. Whereas, a debt collector at a collection agency is hired for that specific job. Their pay is based on a quota and they make commission for what they collect.

There is an awful lot of fraud in the debt collection industry. The real deadbeat is the type of person who has absolutely no intent to pay their debts and bounce checks all over town. You are not this type of person. It is important to emphasize that the last time I checked, the United States no longer have debtors’ prison.

Bad debts are sent to collections and are reported on your credit report without you ever even being billed. Once you learn the basics of dealing with debt collectors then this knowledge will make your life much easier. Now for those of you who repeatedly don’t pay your bills and constantly incur new ones, Get Help! You are making your own problems, and I really can’t help you. I don’t recommend that anyone should take advantage of the credit system and many Americans do. The advice posted on my website is for hard working New Jersey-ites who are abused each and every day by ruthless debt collectors and collection agencies.

It is important to emphasize that just because a debt collector advises you that you owe an old credit card debt means absolutely nothing! Understanding that first and foremost is of critical importance. So many people are fearful of having a conflict with a debt collector that they simply pay the debt to avoid any confrontation. These same debtors are making a major mistake because they often pay the debt without receiving any verification that the debt is valid. As per the FDCPA, one of your many rights is that you have the right to dispute the validity of a debt. This can mean anything from interest being charged, fees and penalties and original balance.

If a debt has been sold and resold how are you absolutely sure that you owe anything? You can ask the collector. It is as simple as that. The first time you get a notice from a debt collector or a phone call, you should advise them that you want the debt validated. You have an absolute legal right to request this. If you have ever looked, you will even see on the actual notice from the collection agency, the following mini Miranda:

This is an attempt to collect a debt. Any information will be used for that purpose. If you dispute the validity of this debt you have 30 days to notify us of such.

If you do not answer this letter, then the debt collector can assume the debt to be valid. You MUST answer!

This warning is advising you that you have an absolute legal right to question the validity of debt. You should request that the collection agency to send you copies of the contract, the original documents from the original creditor, the last payments posted, and all fees and penalties added on. If the collection agency can’t verify the debt’s accuracy then that means that the consumer debt cannot be validated. Therefore, you may not owe the debt or have to deal with it being reported to your credit. If they bought a valid debt, they should have valid documentation from the source who sold it.

2. How are collection agencies regulated?

Collection agencies are regulated by the Fair Debt Collection Practices Act, which imposes many restrictions on collection activities. However, the FDCPA applies only to third‑party collection agencies and not to the original creditors who collect their own debts.

3. What is the Fair Debt Collection Practices Act?

The FDCPA is a federal law that provides residents of all states with considerable rights and protections against abusive, unfair and deceptive debt collection practices used by debt collectors. Examples of debt collection practices prohibited by the FDCPA include using profane language, lying and calling a debtor at work if the debt collector knows the employer disapproves. The debt collector must also protect the debtor’s privacy by not disclosing the debt to others such as friends, family members or co‑workers.

A debt collector, as defined in the FDCPA, is anyone who regularly collects debts on behalf of an original creditor. Original creditors, such as credit card companies and banks, are not considered debt collectors when they attempt to collect debts owed directly to them. Therefore, original creditors are not covered under the FDCPA.

The FDCPA covers only consumer debt, which includes personal, family and household debt, but not business debt or any debt incurred for business purposes. Common types of consumer debt are credit card debt, automobile loans, home loans, utility bills and medical debt.

4. Who is considered to be a debt collector under the FDCPA?

Let’s start with who is, in fact, a debt collector. The FDCPA states that a debt collector is someone, other than the actual creditor or its employees, who regularly collects consumer debts on behalf of creditors. The FDCPA does not apply to the creditor itself. This is a very important distinction. Therefor, if you owe a doctor and that doctor attempts to collect what you owe, that doctor is not covered under the FDCPA. He may however, be covered under the laws of the state where the consumer lives.

5. What are the restrictions that are imposed on collection agencies by the FDCPA?

The FDCPA has imposed certain restrictions on debt collectors, and these include the following:

a. Debt collectors cannot contact you at unreasonable times. As per the FDCPA, unreasonable time for contact is before 8:00 A.M. or after 9:00 P.M.

b. Harassing, oppressing, abusing you or using obscenity, racial slurs or insults in connection with the collection of debt is prohibited by FDCPA.

c. The person who is trying to collect the debt cannot lie or conceal his or her identity on the phone.

d. FDCPA prohibits the collection agencies from contacting you at work in spite of a request by you that they should not contact you at work. Moreover, they cannot inform your employer the reason behind the call, unless first asked by the employer.
Debt collectors can only communicate with a third party such as a relative, neighbor, or employer for the purpose of acquiring location information about the debtor. Co‑signers to the debt, however, may be contacted by the debt collector.

e. While gathering information about your location, they cannot give out any kind of information regarding the debt. Debt collectors are also not allowed to contact you or the third party via post card or use any kind of notation, symbol or language on an envelope that shows they are a debt collector.

Please note that a debt collector can refer your case to an attorney or to report your debt to a credit reporting agency, in such case he can warn you. However, according to the FDCPA, debt collectors cannot threaten you with actions which they do not intend to carry such as: wage garnishment, threatening you with arrest, repossession harming your score, or other false threats just to intimidate you.

6. What are the legal requirements that a collection agency must adhere to while collecting a debt? What is a first written notice that is sent by a collection agency?

The collection agency must first mail you a written notice within five days after they first contact with you. This notice must notify you the total amount of money owed by you, and the name of the original creditor to whom you owe the debt.

The notice must also inform you that if you do not believe that you owe the debt then dispute it within 30 days. If you don’t dispute the debt within 30 days after you receive the notice, then the debt will be presumed to be valid by the debt collector.  The notice must also include a statement that if you write back disputing the debt within 30 days, the debt collector will investigate and verify that the debt is accurate. The notice must also notify you about your right to ask for the name and address of the original creditor.

7. Do I have the legal right to require that the debt collector validate my consumer debt(s)?

Yes, you certainly have this legal right. One of your most important rights as a debtor is to request that the collector must verify and document your debt. In many cases, the third party collector will not be able to adequately document your debt. In many instances your consumer debt may be five to ten years old. It may be impossible for the collector to substantiate the debt. Many collectors are geographically very far away from the original creditor. It may be logistically very hard for the collector to obtain the original contract and other important documentation to adequately validate the consumer debt as per the legal standards as enunciated in the FDCPA. Moreover, many collectors drop their case if you repeatedly exercise your legal rights to request the validation of your consumer debt. Collectors are all about volume. They do not have adequate time or resources to research and gather all of the necessary documentation to validate your debt. Moreover, in many cases your individual consumer debt may have been transferred many times over.

Consumer debt is repeatedly sold to different companies for pennies on the dollar. Each time a consumer debt is sold it loses value. The older the consumer debt is, then the cheaper it is sold. Old consumer debt is commonly referred to as “zombie debt” in the world of consumer debt collection. It is extremely difficult for a collector to send you all of the necessary legal paperwork to document and substantiate the “chain in title” of the debt, and to verify that the debt still exists.

If you have been contacted by a debt collector then you should immediately be cognizant that you have a right to dispute the validity of the debt. Before you even consider paying the debt, you should request that the bill collector provide you with adequate proof of the (alleged) debt.

The FDCPA provides that debts that are pursued by a debt collector must be validated if so requested. The validation of the debt is every debtor’s right. You don’t need a reason to request that your old credit card debt be validated. The fact that you request a validation is sufficient enough to evoke to protection of the FDCPA.

The Act provides that within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall (unless already provided in the initial contact), send the consumer a written notice containing ‑ (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; and (4) a statement that if the consumer notifies the debt collector in writing within the thirty‑day period that the debt is disputed, the debt collector will obtain verification of the debt.

This means that if you write a debt validation request, all communications and enforcement must stop until the debt is validated. Yes, that means lawsuits also.

It is important to emphasize that many people will pay a collection account, and thus risk renewing the statute of limitations only to find after it is too late that they had an absolute defense to the alleged debt. Many people would be very surprised how often a collection agency cannot validate a debt, and therefore cannot legally enforce collections.

8. I receive at least 20 (twenty) collection letters a week. I also receive 25 (twenty-five) collection calls a day. I am on the verge of a nervous breakdown. How can you stop receiving all of these collection letters and calls?

Collection agencies can demand that you to pay off your consumer debt through letters. Alternatively, they can hound you by making endless phone calls to your home or job and ask that you to payoff the outstanding balance. However, they must stop contacting you if you send them a cease and desist letter asking them to stop communicating with you. These phone calls can be very harassing. Many are recorded messages, or are made from collectors from all around the world. After receiving a cease and desist letter from you, the collection agency can contact you only one more time to notify their actions: they will tell you either that they will stop contacting you or that they are intending to take legal actions against you.

9. Can a collection agency add interest on your old consumer debt?

Collection agencies are permitted by law to add interest and late charges to the debt that is owed provided that you agreed to these contractual terms in the original consumer contract. If a collection agency demands interest charges then that amount should be shown as a separate amount from the principal.

10. What type of recourse is available to a debt collector if you refuse to pay your credit card debt?

The main weapon that collectors and collection agencies have is that they can aggravate and harass you to tears. The endless phone calls often drive many of my clients to drink or to a nervous breakdown. The endless collection calls are the major reasons that drive most of my clients to my office. Many clients can’t take the stress of earning a living, dealing with your spouse and children, and then receiving 10 to 15 collection calls a day. This type of stress and dealing with high gas prices is enough to cause many Garden Staters to just give up.

Another major weapon that they have is the power to embarrass you. Many debtors list their home phone number or work phone number on their original credit card application. The collectors receive this information when they receive your file. The collectors often call your job or your home. Their main reason to call these places is because they want to embarrass you. The debt collectors want to embarrass you by letting all of your co-workers and bosses know that you are a deadbeat. Moreover, the collectors often call your home because they want your parents and other family members to know that you don’t pay your debts. The bottom line is that the power to aggravate you and to cause you embarrassment is the collector’s major weapon. A collector really does not have significant legal power to collect the debt. A collector can’t sue you, seize your bank account, or garnish your pay. These remedies are only available if you are sued by a collection attorney. Debt collectors and collection agencies can also report your debt to the major credit bureaus.

If you are sued by a collection attorney, then he has a wide array of legal remedies which include:

a. Filing suit in New Jersey Superior Court.

b. Obtaining a money judgment against you.

c. Pursue post-judgment collection actions that can include garnishments, citations, attachments and bank garnishments.

In addition, any property that you own that is secured by a loan may be repossessed and later sold at an auction. You will be responsible for any deficiency that results from said repossession and sale. The creditor may also choose to not repossess the property and instead, sue you in court for the full amount owed.

11. Let’s focus on collectors who are covered under the FDCPA. What actions can the debt collector undertake to collect the debt?

The collector can contact you by mail, in person, or by telephone. He cannot contact you at times that the collector knows are inconvenient for you, unless he is given permission. It is generally assumed that times before 8:00 A.M. and after 9:00 P.M. are not convenient. The collector is not permitted to contact you at work if the collector has reason to know that your employer forbids employees from being contacted by collectors at work. If you advise the collector that you do not wish to receive telephone calls at work, he must honor your request.

If you are represented by an attorney and the collector is made aware of that fact, then he may not contact you at all. His only source of contact from that point forward would be with your attorney. If you do not have an attorney, then you can still limit the contact that you receive from collectors.

You can stop a collector from calling or contacting you if you notify the collector in writing that you do not wish to be contacted any further. Unfortunately, this cease and desist letter will not stop a collection lawsuit if the collector decides to sue you. However, he cannot threaten suit if he truly has no intent of suing you. If you dispute, in writing, all or part of the debt that he is collecting on, then he must immediately cease contact with you. He can resume contact with you once he sends you proof of the existence of the debt.

12. What information must the first notice that I receive from a debt collector contain?

The first notice that you receive from a debt collector is very critical under the FDCPA. That notice must be given within five days of the first contact with you. The notice must include the following information:

a. The name of the creditor to whom you owe money.

b. The amount that you owe.

c. A statement that the collector will assume the debt is valid unless you dispute all or a part of the debt within thirty days.

d. A statement about what you should do if you dispute the debt.
This would be a statement to the effect that if you dispute the debt, the collector will send you verification of the debt.
An important point is that a debt collector may contact any person in an attempt to locate you. However, he cannot talk to anyone more than once or refer to the debt when doing so. If the debt collector uses mail to contact you or another person, then the envelope cannot identify the sender as a bill collector.

13. What type of conduct is strictly prohibited by the FDCPA?

A debt collector cannot engage in conduct which involves abuse or harassment. He cannot threaten violence to you or your property. He cannot threaten to harm your reputation to others. He cannot use obscene or profane language. He cannot telephone you repeatedly in an attempt to harass you. He cannot use false, deceptive or misleading statements in an effort to collect the debt. He cannot misrepresent the amount of the debt or claim to be an attorney. He cannot threaten to take your property or garnish your wages unless he actually intends on doing so. He cannot threaten any action that is illegal.

A debt collector also cannot offer to accept a postdated check by more than five days. He cannot collect any amount as interest or fees, unless said charge is pursuant to the underlying contract. Finally, he cannot threaten to file suit in an inconvenient court or forum.

14. What if the collector “blows off” the restrictions of the FDCPA?

You have the right to sue the debt collector in state or federal court. That’s right; you can actually sue the collector who is attempting to collect from you. You must do so within one year from the date of the alleged violation and may receive $1,000 in damages for each violation. You may also be able to receive court costs and attorneys’ fees if you are successful. If you feel that you are being violated then you should contact an attorney who deals with the FDCPA on a regular basis.

15. I have disputed an old credit debt but I never heard any response from the debt collector. I sincerely believed that the collector had a legal duty to validate any and all consumer debt(s)? What is happening to my account?

Rather than respond to your request the debt collector probably decided to abandon any further collection efforts after they received your dispute letter. There is nothing in the FDCPA that compels debt collectors to respond to a dispute unless they intend to continue collection efforts. More than likely the collector will sell your debt so be prepared for a new collector to contact you.

16. Can a debt collector call me if I have a lawyer?

A debt collector is prohibited from contacting you once you advise him that you have a lawyer. You should simply give the debt collector the name and telephone number of your attorney and tell the collector to call your lawyer directly.

17. How can you dispute an old credit card debt?

If you decide to dispute the debt then you should do so in writing. You should send the letter via certified mail and also keep a copy for your records. This letter will force the debt collector to verify the validity of the debt.

18. Can the debt collector call my neighbor?

Yes, for the sole purpose of attempting to locate you. However, the collector cannot call that person more than once and he cannot mention that he is attempting to collect a debt.

19. The debt collector is threatening to put me in jail. Is this legal?

No. The debt collector is engaging in illegal collection tactics. The most serious action that the debt collector can do is to file a lawsuit and attempt to collect upon the judgment. You will not be thrown in jail if you fail to pay a consumer debt. If debtors went to jail if they failed to pay an old credit card debt, then the US government would have to build a jail the size of Texas. If a lawsuit is filed, however, then you should seek legal help. If you blow off a summons, then a default judgment could be entered against you. A judgment lasts for twenty years. Judgments can have serious consequences. Your credit report will be “nuked.” Your ability to qualify for a car loan will be hurt tremendously. You will not be able to purchase a home until the judgment is cleared up. A mortgage company will not issue you a mortgage if you have outstanding judgments against you. Therefore, it is sheer insanity to blow off and ignore a summons if you should receive one.

20. What types of debt collection practices are prohibited?

a. Harassment: Debt Collectors may not harass or abuse you. For example, debt collectors may not:

b. Use threats of violence or harm against the person, property, or reputation;

c. Publish a list of consumers who refuse to pay their debts (except to a credit bureau);

d. Use obscene or profane language;

e. Repeatedly use the telephone to annoy someone;

f. Telephone people without identifying themselves;

g. Advertise your debt.

21. What is a summary of the illegal actions by debt collectors that are barred by the FDCPA?

a. A debt collector calls you at work and knows that it is inconvenient or that your employer disapproves or forbids it.

b. A debt collector calls you before 8:00 a.m. or after 9:00 p.m. in your time zone.

c. A debt collector makes an excessive number of phone calls to annoy or harass you.

d. A debt collector knows that an attorney, whose contact information is known or is easy to locate, represents you and the debt collector continues to contact you.

e. A debt collector tells a person other than you, your spouse, or your attorney that you owe money. (If you are a minor, the debt collector can tell your parents or guardians about the debt.) Debt collectors can only communicate with other people to obtain contact information about you.

f. A debt collector misrepresents the amount, character, or legal status of a debt.

g. A debt collector gives others credit information about you that is false, or should be known to be false.

h. A debt collector fails to honor your dispute or cease communication rights.

i. A debt collector threatens to take your property or garnish your wages when this action would not be legal or the debt collector does not actually intend to do it. Your property cannot be taken and your wages cannot be garnished without a court order (judgment).

j. A debt collector uses, or threatens to use, violence or any other illegal means to harm you, your family, your reputation, or your property.

k. A debt collector uses profane or obscene language when communicating with you.

l. A debt collector threatens you with criminal prosecution or implies that you have committed a crime. Debt and credit issues are matters of civil law, not criminal law.

m. A debt collector tricks you into accepting charges for collect calls, telegrams, a C.O.D., etc.

n. A debt collector cashes, or threatens to cash, a postdated check before the date written on the check, if the check is postdated by five days or more.

o. A debt collector does not give three to 10 days advance notice before cashing a check that is postdated by five days or more.
A debt collector claims to be an attorney or sends a letter made to look like it is from an attorney (unless the debt collector really is an attorney).

p. A debt collector sends a letter that is made to look like a government or court document when it isn’t.

q. A debt collector sends a government or court document that is not recognizable as such.

r. A debt collector threatens any action against you that is not legally feasible or that the debt collector does not intend to take.

22. What are some of the false statements made by debt collectors that are covered by the FDCPA?

False statements may include (and this list is just a small example) threats to:

a. Contact your employer about the debt;

b. Call you everyday until the debt is paid;

c. Sell the debt to another company for the purposes of continuing collection on a time‑barred debt;

d. Contact neighbors about the debt;

e. Contact the Department of Homeland Security about your alien status;

f. Threaten imprisonment or criminal punishment;

g. Report a financed vehicle as “stolen” because you missed one or more vehicle payments;

h. File or threaten to file criminal bad check charges on a post dated check that the collector solicited from you;

i. Immediately evict (by an agent for a landlord); lockout, or seize personal property where such relief is limited by state law;

j. Sue, where no suit is intended, e.g. a collector requested “settlement prior to possible legal action” where the collection agency had no authority to sue, or to retain counsel;

k. Threaten or imply that the collection agency has multiple employees or investigators working to collect the debt, where only one or two people work for the agency;

l. Collect or sue for “collection costs,” “attorney’s fees,” interest not pre‑agreed to in excess of that allowed by statute, “fines,” or any other fee in excess of the actual amount due, unless the original agreement provides for the amount the collector threatens to collect. For instance, the collector cannot threaten to add attorney’s fees or his fees where the agreement you signed does not specifically provide for them. Let’s say you went to the dentist and just signed consent form and a medical history. You agreed to pay for all charges if your insurance did not. Nothing is mentioned about anything else. The collector cannot add any other fees or even and especially, his costs, late fees or other charges.

m.  Add “collection costs, attorney’s fees” and similar additional charges have also been held to be deceptive and misleading, because they do not state exactly what debt is being sought;

n. Sue or bring any kind of legal action where the threat is not followed through (i.e. a scare tactic), or any number or other threats designed to demoralize, humiliate, degrade; embarrass or intimidate a debtor into payment;

o. The collector can’t lie and advise the debtor that he is legal counsel or an attorney/lawyer when he is not;

p. The collector can’t threaten or attempt to mislead a debtor that a claim will be transferred to an attorney or separate department of a collector (e.g. “This will be transferred to our legal department for further action”).

23. What other tactics are also illegal under the FDCPA?

a. It is unlawful under the FDCPA to threaten a lawsuit if no such action is intended. This even applies if the collector says if you don’t do something within a certain time period, something else may happen. The attorney cannot sue you in a state that is not your home state, under the FDCPA. Therefore, the threat is an empty one. Empty threats are punishable under the FDCPA!

b. Legal letters that are not reviewed by a lawyer. It is unlawful for such a letter to be sent unless the lawyer reviews the letter? Do you believe that when thousands of letters are issued that the lawyer reviews each one? Do you also believe in the tooth fairy? Where the correspondence is not reviewed by counsel, then the correspondence violates the FDCPA. Look at the letters you receive from lawyers. Were they signed by hand? If not, perhaps they were not reviewed by a lawyer. You may have a case under the FDCPA.

c. The collector’s threat to “make this go legal” or to “turn the matter over to the legal department” may violate the FDCPA where the collector has no legal department. Do you think that the collector may be a collection operation only? If so, perhaps they have no legal department, i.e., the legal aspect is handled outside of the company. If this is the scenario then this may also constitute another violation of the FDCPA.

d. It is also a violation to send a letter stating that the collector will “recommend litigation” or “advise the creditor to sue.” Some of these types of correspondences have been found to violate the FDCPA because it, in essence purports to give legal advice to the creditor. The collector is not permitted to give legal advice, unless, of course, if the collector is an attorney himself.

24. What is the legal standard to determine if a threat is covered under the FDCPA?

The Least Sophisticated Consumer Standard: Did you also know that it does not matter if you believed the collector’s threats or that a person of your intelligence would not have believed the threats. The FDCPA’s standard is the “least sophisticated consumer standard.” The courts have consistently said: The concept of deception protects even the ignorant, unthinking and the credulous, least sophisticated consumer. See the discussion below and Jeter v. Credit Bureau, Inc., 760 F. 2d 1168 (11th Cir. 1985).

It is also unlawful to sue a consumer in a remote jurisdiction that is not where the consumer resides, or the one in which the contract was made. It is also unlawful to charge for items not due under the contract.

A debt collector and often a collector can violate the law in many ways. Each time that a collector violates the law, then you may be entitled to significant damages in an amount commensurate with the gravity of the violation. Some collectors have gone so far as to threaten arrest, jail, or harm to loved ones, including informing friends and work associates of the debtor’s financial embarrassment. Any threat to do something that is not allowed by law is grievous and actionable.

25. What is a debtor’s recourse if you believe that a debt collector violated the law?

You may have the legal right to sue a collector in a court of law. If you win, you may recover money for the damages you suffered and, in certain jurisdictions, you may recover statutory damages. In addition, in certain jurisdictions, court costs and attorney’s fees may also be recovered.

26. Where can you report a debt collector for an alleged violation?

You report any problems you have with a debt collector to the office of your state attorney general and the Federal Trade Commission. Many states have their own debt collection laws and your state attorney general can help you determine your rights. In addition, you may contact a local attorney to determine your legal options regarding an alleged FDCPA violation.

27. What can I recover in a court of law if I am continually being harassed by a ruthless debt collector?

You can recover damages of $1,000 per violation in addition to court costs and attorney’s fees.

For further information:

Contact the Federal Trade Commission. There you will find detailed information about the FDCPA and what debt collectors can and cannot do when collected debts.

If you have a complaint against a debt collector, you should contact a local attorney who is experienced in filing lawsuits under the FDCPA. You can also contact the Federal Trade Commission, Consumer Response Center, 6th Street and Pennsylvania Avenue, NW, Washington, DC 20580. You can also call toll-free (877) FTC-HELP (382-4357)

28. What is the Mini-Miranda Warning?

Each time a debt collector contacts you, he must give you what is known as a “Mini‑Miranda Warning” This warning received that name because it is reminiscent of the warnings that police should give you if you are arrested, however, “Mini‑Miranda Warnings” have nothing to do with criminal law. A Mini‑Miranda Warnings must contain the following words (or words imparting this meaning):

Hello, I am   (name of collector). I am (or this office is) a debt collector representing_
(creditor). Information obtained during the course of this call will be used for the purpose of collecting the debt.

If the creditor has not been advising you as above, then you may have a right to sue it under the FDCPA.

If you receive any collection letters in the mail from collectors then they  must contain similar warnings such as:

This is an attempt to collect a debt. Any information obtained will be used for that purpose. Unless within 30 days of your receipt of this notice, you notify us that you dispute the validity of this debt, it will be assumed to be correct. If you notify this office within thirty days that you dispute the validity of the debt, we will obtain verification of the debt or a copy of the judgment. If you request it within 30 days, we will provide you with the name and address of the original creditor (if different from the current creditor).

If the letter does not state the above, or words similar or close to the above, then you may also have a right of action. Furthermore, did you know that no bill collector or creditor has the right to contact any third person about your debt, except to get information solely to locate you? This means that if a bill collector or a creditor tells any except you that you owe them money, they too can be sued.

29. What can I possibly do to stop all of the creditors from calling me morning, noon and night at my job?

The FDCPA clearly states:

Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt ‑

********

(3) at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.

Simply stated, any debtor can stop collectors from harassing them at work by placing the collector on notice that the employer of the consumer does not permit him or her to receive the calls. Do you think your employer allows you to be harassed at work? Is this why you are paid? Probably not! You should tell the debt collector this and confirm it in a certified letter! Thereafter, you should take detailed notes as to each time the collector violates this warning. You should also bring your notes to your attorney and have him use it against the collector in court.

30. What are my legal rights to stop any harassment by my debt collectors?

Insofar as collectors are concerned, you are not required:

a. To discuss anything with a collector unless you want to;

b. To answer a phone for a collector (this works with called ID).

c. To speak with the collector if you do answer.

d. To answer any questions at all posed by the collector (collectors will often demand that you rearrange your finances, or cut back on other expenses to pay them; there is no requirement that you justify your lifestyle to a collector).

e. To say “good‑bye” before you hang up.

f. To be truthful about your personal and financial affairs (you do not have to disclose private information about assets or income).

It is very important to emphasize that there is no reason you need to acknowledge that you owe any money to the collector! This is very important if the debt is old. If you acknowledge the debt, then you may actually extend the time the creditor can sue on it. In New Jersey there is a six-year statute of limitations to sue on an old credit card debt. You can extend this limitation if you acknowledge the credit card debt or even if you make a partial payment!

In fact, you do not even need a lawyer to stop collectors from calling you. A lawyer will be able to point out possible lawsuits that you might be able to bring. All you need to do is to mail the creditor or collector a “cease communication” letter. This request can be made any time, but it must be made in writing (and this is important to preserve your rights to litigate later on). It is always preferable to send the request by certified mail and keep a copy.

This copy will be proof of your request should you need to sue the creditor. Once the creditor or collector receives your letter, then he or she can only contact you to inform you of any action he or she intends to take, or to tell you that he is terminating efforts to collect the debt. This letter is enough for you to legally stop any further contact, and this includes phone calls and threatening letters. Your letter may also state that you are refusing to pay for any reason you choose, or that you are disputing the debt. It is important to note that writing this letter will not protect you from a lawsuit though. Moreover, writing the letter does not excuse you from the debt. The vast majority of the collectors are not lawyers and they cannot sue you! This is the reason why they harass you in the first place. Harassment is really the only way a collector can make you pay that old credit card debt. However, if a debtor utilizes all of his protections under the FDCPA, then he can essentially “declaw” any collector, and make them powerless.

31. Could you please give me a sample cease and desist letter?

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
ABC Debt Collection
1234 Main St
Anytown, USA 12345

Re: Account #:

Dear ABC Debt Collection:

This is my notice to you under the Fair Debt Collection Practices Act to stop communicating with me in regards to the alleged debt stated above.

If I receive any communication from you, by phone or mail, I will file a complaint with the Federal Trade Commission, my state Attorney General, the American Collectors Association and the New Jersey State Bar.

I do not want to deal with you. I will contact the original creditor to resolve this matter, if that is warranted.

If, as a result of this letter, you place a negative mark on my credit, I will take any and all legal action available to me.

Sincerely,

Mr. (or Mrs.) Consumer

32. What happens if the collector refuses to validate the debt?

You should only be so fortunate. If after a validation request under the FDCPA, the creditor refuses to cooperate, then the creditor may not legally collect the debt. If the collector still pursues collection efforts, then the law is violated and a suit for damages may be brought.

33. What if the debt collector ignores the request and collects the debt anyway?

The FDCPA provides for a private right of action against violators. This means that you can get a lawyer and sue for damages. A partial lists of damages that can be awarded is as follows:
a. Damages up to $1,000 for each case. This means that the violator can be charged even though there are no other damages (see below).

b. Attorney’s fees. You can make the violator pay for your lawyer. This is big advantage; lawyers are expensive!

c. Actual damages that include:

Stress related injuries;

Heart attack, angina, chest constrictions;

Miscarriage;

Ulcers, diabetic flare‑up;

Shock;

Loss of appetite;

Crying;

Nightmares;

insomnia, night sweats;

Emotional paralysis;

Inability to think or function at work;

Headaches;

Shortness of breath;

Anxiety, nervousness;

fear and worry;

Hypertension (elevation of blood pressure);

Stress to children;

Irritability;

Hysteria;

Embarrassment, humiliation;
Indignation and pain and suffering.

And this is just a partial list!

34. I have not been paying my credit cards because I have been sick with cancer the past two years. I have just received these legal papers that advise me my past due Visa account is going to be litigated by some outfit called the National Arbitration Forum. What is this all about?

The credit card companies’ newest best friend is the credit card arbitration clause. This clause is also referred to as a private arbitration clause. The latest trend in oppressive tactics employed by credit card issuers is a compelled arbitration agreement. In short, arbitration “agreements,” and I quote that word because most of the time the consumer is unaware he or she has “agreed,” deprive the consumer of his right to contest the claim for judgment by the credit card company in court. In simpler words, the credit card company simply files its claim to a friendly forum and requests an award. Thus, the poor consumer can’t contest the interest or penalties in the Special Civil Part Court.

The National Arbitration Forum (“NAF”) is basically a sham created by the credit card companies. The NAF is one of the country’s three largest arbitration companies. The NAF is no friend to consumers, and why should they be? The credit card issues have billions of dollars to spend. Whereas, the consumers are mostly on the verge of bankruptcy. The NAF actively courts credit card issuers and often makes no bones about where their sympathies lie. The NAF will almost never dismiss a case filed by a credit card issuer. Moreover, the NAF will never hold that credit card company to the same standard of proof that the N.J. Special Civil Part Court will. Finally, you will never see a consumer attorney on any of their arbitration panels.

35. I “blew off” off the National Arbitration Forum papers that I have received. How can I fight the arbitration award that has been granted against me

In New Jersey it is very doubtful that an arbitration award that was entered by the NAF will be enforceable against you. If you are sued in the NAF or before any other private arbitration organization, then in most cases, these awards may not be enforceable unless certain procedures are followed. A debtor must It is strongly recommended that you do not ignore arbitration notices or any kind of court papers no matter how they are served upon you. If you receive any NAF papers, then you should hire a consumer rights lawyer. More that ever it is critical that you hire the right attorney; one who is familiar with this rather complicated process.

It is not advisable that you should participate in any arbitration proceeding before any private arbitration company without assistance of a lawyer who has experience in this process. In simpler terms, if you are sued in court or before the NAF or brought before any arbitration company, don’t go it alone!  Don’t be your own lawyer!

36. What if you were already brought before the NAF, or there is already an private arbitration award, or an award that was entered as a judgment? 

In that case, then you should immediately seek legal help. You will need to request that the court that entered the arbitration award as judgment to vacate it. You should be aware that a judgment entered based upon a NAF award may be challenged based upon a number of legal challenges. However, it is critical that you retain an experienced debtor’s rights lawyer.

37. I have been hounded by collection calls. The collectors have really made me a nervous wreck. One collector has convinced to pay my Discover Card payment by a “Check by Phone.” Is this a good idea?

In my professional opinion you would have to have rocks in your head to give anyone your checking information over the phone.  Please be advised that there is no deal in the collection industry that can’t wait three days for a letter to arrive. I have never heard of any creditor’s business failing because a check arrived a week late. Given the understanding of these dynamics, do not be fooled that the deal you receive is a limited time offer. No offer that is so good that a debt collector is willing to make it, will turn unacceptable in a week. Your payment checks will not go bad and not spoil! Therefore, there is no reason to give a  creditor a check by phone. A check by phone hands your checkbook over to the debt collector. Would you trust a debt collector with your checkbook. I have heard of many cases wherein a debt collector has wiped out a debtor’s bank account by using the check by phone information. If you give a collector a check by phone, then you are giving up some very important personal information. You are giving your creditors your banking information. Under New Jersey law it is very difficult to determine where a person does their banking.

38. I have received a collection letter with the heading “IRS Statutory Notification Letter ‑ Publication 908.” Moreover, this collection letter was referenced as an IRS Form 1099. Is this type of letter legally valid?

According to the FTC’s interpretation, this type of letter clearly violates section 807(5) because it is a false threat of legal action.

A typical scenario is as follows: You receive an official looking letter that reminds you of a debt you have not paid. The letter then refers to the creditor’s “right to forgive this debt and submit a Form 1099 to the Internal Revenue Service on all bad debt accounts.” The last sentence usually reassures you that the creditor does not intend to take such an action at this time, and then urges you to remit payment to “avoid any additional collection activity.”

In general, a Form 1099 is used to report additional income. Let’s say you owe a creditor $10,000 and the creditor files a Form 1099. This would mean that you, in theory, must report the $10,000 as income on your federal tax return. If you settle a credit card debt of $10,000 for $5,000, then the creditor will send you a Form 1099 for $5,000. The $5,000 of credit card debt that was forgiven is considered to be income by the IRS. You will have to pay income tax on this forgiven debt. The IRS does not require creditors who discharge debts to file a Form 1099, no matter how much the debt is worth. Second, although implied, creditor rarely file Form 1099 even when the debt remains unpaid.

Thus, the official looking letter you receive creates the distinct but false impression that the collection agency is required by the IRS or by a statute administered by the IRS to send that collection letter to you. Since this is not true, this representation violates Section 807(10). Moreover, this threat also may create the additional false impression that the IRS has been informed about the debt at issue, also in violation of Section 807(10).

The whole intent behind the letter is to scare you into paying the debt. However, since the filing of such a form is never the result of a failure to pay, and since the creditor does not ever intend to file such a form, a representation to the contrary, such as in the letter you receive, violates section 807(5).

Additionally, section 807(9) prohibits documents that fraudulently appear to be officially authorized by the government or otherwise mislead the recipient as to their authorship. The purpose of this section is to discourage debt collectors from attempting to use the authority of the government deceptively to scare consumers into paying the debt at issue. Thus, dunning consumers with letters that look like government documents violates both the letter and the spirit of this provision.

39. What additional legal rights do I have against a debt collector?

It is illegal for them to call you at work, or at home or have your mailbox flooded with collection notices. If a debt collector is bothering you simply send them a certified letter called a cease and desist letter. In the letter tell them you do not wish to be contacted any further by mail or phone. They must abide by your request. If they do not, you can hold them liable under the Fair Debt Collection Practices Act. Any third party debt collector or collection attorney is under the guise of the Fair Debt Collection Practices Act. Only an employee of the original creditor whose occupation within that company is to collect debts is exempt.

Once you put them on such notice then they can only contact you one last time to tell you that they are planning to sue you. If this happens you have to use common sense and weigh the facts before panicking. Is the debt large enough to consider filing a lawsuit? Well, if it is less than $500, probably not. Collectors love to threaten to sue to obtain payment but that too is a violation. They cannot threaten to sue a person if they had no intention of following through. If the debt is large enough to sue you then make sure you look at the statute of limitations for the debt.

If the Statute of Limitations has expired then legally you are not obligated to pay that debt. If they did sue you, all you would have to do is show up and advise the court that the Statute of Limitations has expired. Another factor to consider is where the creditor is located and if they have offices near you. Do you think a debt collector is going to fly to your state to sue you? Most likely not. They may have offices near you and that needs to be considered or they may sell the debt to a collection agency near you. Again, all this is neither here nor there if they do nothing.

40. Do I have a right to right to negotiate my old credit card debt with the collector?

A debt collector wants to be paid. They are paid and rated by how they collect. If they are having a very slow month and you offer to settle an otherwise uncollectible debt, then you may obtain a very advantageous settlement. You have to consider timing. Debt collectors are more inclined to agree to settle toward the end of the month.

If you obtain an agreement from a debt collector then it is imperative that the settlement must be writing! I can’t over emphasize this point enough. Never ever take the collector’s word for it! Get all the facts on paper before you agree to anything. If a debt collector advises you they will rate the debt as settled rather than paid charge off, and that they will accept 50% as full satisfaction then why would they have a problem putting that in writing? Because they have no intention of following through! Once you pay a debt collector there is no negotiation to do. You have given them exactly what they wanted. Are they licensed and bonded if required by their state? You’d be surprised that they are not. Don’t get burned. If you settle a debt with a collector then it is imperative that any settlement must be in writing.