At Goldberg & Oriel Law, we understand that managing debt collection is a crucial concern for both creditors and debtors. Before delving into the intricate details of debt collection laws, it’s essential to grasp our dedicated approach to resolving these matters. Learn more about [Our Debt Collection Process](https://golawoffices.com/debt-collection-lawyers-massachusetts/) on our website.We begin the debt collection process by delving into the history and relationship between the debtor and the client. This personalized approach sets us apart from mass collection efforts, showing debtors that we take a direct interest in their case and won’t relent.
If the initial “demand letter” doesn’t elicit the desired response, we are prepared to take legal action. We leverage our collection tools, from attaching bank accounts to issuing real estate attachments, always ensuring swift execution. Our commitment to professionalism and your financial well-being remains unwavering. Trust us to protect your interests while upholding both your reputation and ours throughout the entire process. There are strict rules and laws regarding debt collection both at the federal and state levels. Keep reading for more info about legal debt collection laws and the appropriate debt collection processes in general.
Overview of Debt Collection Laws at the Federal and State Levels
Let’s begin by defining debt collection. The definition of debt collection refers to the process that creditors can use to legally pursue and collect their owed debt payments from these debtors. Along with individuals, a debtor can be a business or an organization too. In addition, the debt being collected could be anything of value that the parties first legally agreed to at a past date. If the debtor does not keep their end of the bargain, the creditor is legally able to recover their money, or other property, and the debt collection process can be enacted. Creditors are also able to collect on fees and other expenses that include accrued interest, late payment penalties, court and other legal costs. However, debt collectors must abide by laws set at the federal level and at the specific state in question level as well.
Debt Collection at the Federal Level
Debt collectors now must follow the Fair Debt Collection Practices Act (FDCPA). They must be sure to follow the federal level’s Fair Credit Reporting Act (FCRA) which limits how certain debt is reported to credit boroughs and other forms of credit reporting sites.
Debt Collection at the State Level
The state-level laws related to credit collection of debt generally refer to making sure that creditors are not engaging in illegal, deceptive, or otherwise unfair debt-collecting practices. Some states also have devised their own state-level laws that are designed to supplement and extend the above-mentioned federal-level debt collection acts already set in place. Additionally, the majority of states have also implemented their own legal statutes that govern how collection of debt practices are legally able to pursue debtors when the debtor is a business or pertaining to other commercial debt collection cases.
Both State and Federal Debt Laws Are for the Protection of All Parties
Both state and federal debt laws and statutes are designed for the protection of both the debtor and the creditor.
Understanding the Fair Debt Collection Practices Act (FDCPA)
The Fair Debt Collection Practices Act (FDCPA) is a federal law that limits the actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity. Suppose you have ever had the misfortune of dealing with an irritating creditor who overstepped what is considered decent and transparent communication between the parties. In that case, you already have an idea of why the Fair Debt Collection Practices Act (FDCPA) was put into place. The act serves to set limits on the actions and communications that a third-party debt collector can legally do. This is in reference to a debt collector attempting to collect on the owed debt of another creditor. There are numerous restrictions and rules placed on these collectors with regards to contacting the debtors.
Some of these restrictions include:
- Number of times that contact can be made
- Time of day that the collector may phone
- Who the collector may contact in addition to the debtor regarding the debt is addressed and limited
NOTE: A third-party debt collector may legally call the debtor’s place of employment, but if the debtor requests that the agent not call them at work again, then the debt collector must abide by this.
- Debt collectors may not call more than 7 times in 7 days, but they are allowed to contact the debtor through social media, by letter or email provided certain stipulations are followed
NOTE: The debt collector must inform the party that they are a debt collector when using social media. They must also use privacy measures. They cannot contact any friends on the social media account. They must also give instructions on how to stop these contacts.
If a Debt Collector Violates Terms of the FDCPA, the Debtor May Sue within a Year. The debtor can sue the third-party debt collector as well as the original creditor in some cases within a year of the violation. They can sue for damages along with legal and attorney fees at both the federal and state level. A clarification of the FDCPA rules that govern debt collectors’ communication with their debtors is found under the Consumer Financial Protection Bureau’s Debt Collection Rule.
Key Regulations and Limitations Specific to Massachusetts
The Attorney General of Massachusetts reminds local residents about the restrictions against certain unfair, deceptive and harassing debt collection communications. For an in-depth guide, click here.
Key Points: The debt collector may not:
- Use profanity or harassing types of communication
- Are limited for times to contact
- Limitations exist work contacting others in an attempt to locate the debtor
NOTE: An oral request to cease contact for work or other parties is in effect for 10 days in Mass. A written request is in place until the debtor revokes it.
- Debt collectors may not charge the debtor mail fees, long distance charges, wire fees or other related expense
- They may not visit you at home more than once per 30 days and only during times when you normally would be awake unless debtor gives permission
- Postdated checks may not be demanded
- May not make misleading, deceptive or otherwise unfair debt collection statements
- May not inform other parties that you owe a debt unless debtor gives written consent
- Limitations or halt on communications after the debt is no longer legally obtainable under the law
- May not falsely threaten imprisonment, arrest or other misfortune when not intending to enforce this if you do not pay debt
- May not attempt to collect more than is legally allowable for each debt
- May only call between the hours of 8:00 A.M. and 9:00 P.M. if the waking hours of the debtor are unknown
NOTE: Debtor must inform debt collector if waking hours differ than the above
- Debt collectors must tell you who they are and give their contact information
CAUTION: Scammers attempt to engage supposed debtors and are often vague on details
- Debt collectors must provide debtor of written details regarding their debt upon request
- May not contact a debtor who has hired an attorney after notification
- Debt collectors may not recontact the debtor until the required written debt notice is sent which gives debtors 30 days to validate debt.
How Compliance with Debt Collection Laws Benefits Creditors
Overall, compliance with debt collection laws also benefits the creditors who are owed money or other valued property. The rules make sure that financial institutions and other entities are not breaking the law. Creditors who keep their debt collection practices above-board legally will have a solid record to back them in court if necessary. Some creditors are unaware of the legal steps that they are able to take, and this may help the creditor to recover their owed debt.
Ready to navigate debt collection confidently? Contact Goldberg & Oriel Law for expert guidance today.