Debt collection is legal, but may not include harrassment

The problem of debt is a large one in this country, and many people have tens of thousands of dollars worth of outstanding debt from student loans and credit cards. Most people are aware of these debts, even if they aren’t too tickled about having to pay them. But every now and again, you might get a call from someone representing a debt collection agency, trying to collect funds for a decades-old debt that you might not even remember. What can you do about that?

Credit card companies often sell off old debts to collection agencies for literally pennies on the dollar. After they have exhausted all of their internal policies for collecting debts, they sell them off to get something for them. After all, a little bit is better than nothing. At that point, the collection agencies own the debt, and they may keep anything they collect from the debtors. This is all perfectly legal. That doesn’t mean that it has to be pleasant for the debtor. There are some laws that apply to the debt collection process. 

Here are some things that debt collectors may and may not legally do in the process of trying to recover funds, according to the Federal Fair Debt Collection Practices Act:

• They may not call you before 8 AM or after 9 PM, nor may they call you at work if you ask them not to do so.
• They may not threaten you with arrest or physical harm.
• Contact third parties, such as relatives, about anything pertaining to the collection of debt.
• Threaten to sue after the statute of limitations has expired. Keep in mind that there is no statute of limitations for student loans, back taxes or child support.

In the event that the debt concerns something you do not remember or think that you do now owe, you should obtain a copy of your credit report to see if there is any information about the debt there. You should also ask the collection agency to provide proof of the debt.  In the event that they sue you, you should probably contact an attorney.

While almost all attempts to collect old debts are legitimate, we should point out that some attempts to do so may only be attempts to obtain your personal information for purposes of identity theft. Many criminals are getting more and more clever about finding excuses to call people in order to obtain their Social Security number, bank account numbers or credit card numbers. If you provide that information to a stranger who calls you, you may find that they then use that information to conduct business in your name, which could leave you with thousands of dollars in additional debt.

You should never provide personal or financial information to strangers who call you by telephone. If in doubt, ask them to make their request by mail.

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