Whether you have missed a single payment somewhere along the line or are delinquent on several payments, the last thing you want is to be harassed by debt collectors. In most cases, people know that they are behind on payments and are struggling to deal with the issue.

Having to deal with a barrage of phone calls, emails, and texts at the same time is like adding insult to injury. You may feel as if no one is on your side, but you do have some protection from collection agencies. They don’t have carte blanche to do whatever they want.

The FTC (Federal Trade Commission) is an arm of the United States government that enforces consumer protection and antitrust laws. The FTC makes sure that the FDCPA (Fair Debt Consumer Protection Act) is followed by collection agencies.

• There are approximately 7,000 collection agencies in the U.S.
• Collection agencies have an annual revenue of about $4 billion.
• Approximately one third of consumers with a credit bureau file were contacted by at least one creditor or debt collector each year, according to a CFPB (Consumer Financial Protection Bureau) survey.
• The FDCPA applies only to debt collectors (the third-party collection agencies), not to the original lender.
• Collection agencies may have been hired by original lenders to recoup debts or they may have bought old debts from the original creditors at a vastly reduced cost.

It will be helpful for you to know exactly what debt collectors are allowed to do, and even more helpful to be informed about what they are expressly forbidden to do.

Collectors are not allowed to:

1. Threaten to harm you or anyone around you.
2. Use abusive or obscene language.
3. Humiliate you by publishing your name and debts. This includes sending postcards that could be read by others.
4. Call you repeatedly.
5. Put you in prison. However, if they sue you and you don’t show up in court, you may lose your case and be ordered to pay your debt. If you do not show up of subsequent proceedings after the judgement is entered the court could enter a warrant for your arrest for contempt of court. Please contact an attorney for more information.
6. Call before 8:00 a.m. or after 9:00 p.m.
7. Lie to you (for instance, by claiming that they will arrest you or by telling you a different amount than what you actually owe, or by pretending to be from a government agency).
8. Contact you at work if you have written to tell them not to.
9. Contact you at all if you have written to tell them not to or if you have informed them that you have hired an attorney. (In this case, they must communicate only with the attorney, going forward.)
10. Contact your family members or anyone else more than once. They may only do this to find your address or contact information and may not disclose your debt. Also, on these phone calls, they may not disclose that they are a collection agency unless they are specifically asked.
11. Neglect to send you a written notice within 5 days of first contacting you. The notice (validation letter) must provide information stating exactly how much money you owe and to whom. It must also provide instructions on how to pay your debt and inform you that you have 30 days to dispute the debt.
12. Chase after you to pay a debt that you don’t actually owe.
13. Sue you after the statute of limitations has passed (although they can still try to collect the debt). The statute of limitations (also called time-barred debt) in Indiana is 6 years, except for auto debt and tax debt.

On November 30, 2020, the CFPB added some additional prohibitions to debt collectors. They are forbidden to:

1. Call you more than 7 times in a 7-day period.
2. Call you within a week after actually speaking to you by phone.
3. Give information about a debt to a credit bureau without having informed you by phone or email first.

Collectors are allowed to:

1. Call you or send letters to you. In November 2020, the CFPB ruled that collectors are also allowed to email and text you.
2. Contact a third party to try to find you, but may only ask for your address, phone number, and place of employment.
3. Sue you. If you lose, you may have your wages garnished or levies placed on your bank account, but that is done by the court, not directly by the collection agency.
4. Negotiate a lower amount for you to pay off your debt. This sometimes happens when your debt has been purchased for pennies on the dollar by a third company, and you should be extremely careful to get everything in writing. You may wish to consult with an experienced attorney before you take a step like this in order to make sure that you are protected.
5. Sell your debt to yet another collection agency.

If a third-party collection agency violates any of the provisions in the FDCPA, you have the right to hire an attorney and take them to court. You could be awarded up to $1,000 plus attorney fees and court costs, plus even more money if your attorney can prove that you suffered actual damages as a result of the violations.

In general, a qualified legal professional can help you navigate the stress of debt collectors who may or may not be obeying the law. The Indiana bankruptcy attorneys at Sawin & Shea pursue collection agencies who violate the FDCPA law, during and after your bankruptcy case. If you are struggling with belligerent calls, contact us at 317-759-1483 or Send an Email for a Free Consultation. We are ready to help.