Dealing With Debt Collectors When You're A Disabled Person
Dealing with debt collectors when you are disabled can be unsettling and even further disabling. Our professionals tell you exactly what to do when a debt collector comes calling on you.
If you are disabled and a debt collector calls, you have rights. You are protected by the Fair Debt Collection Practices Act (FDCPA), a federal law. There may be state laws that protect you as well.
The law is straightforward, but like any legal document, it's heavy reading. If you're curious though, you can download this Federal Trade Commission (FTC) consumer document with the complete FDCPA text.
Let's start with something easier. The following 2-minute video prepared by the FTC (America's consumer protection agency) gives a good overview of your rights when it comes to dealing with debt collectors.
That's a great video BUT... it contains a recommendation that could get you an undesirable result. Read on to find out what our experts say about dealing with debt collectors and how to stay out of trouble.
Let's start with a step-by-step plan that tells you exactly what to do when a debt collector comes calling. Get that precious professional handholding in the following section.
Dealing With Debt Collectors – 5 Steps
This section outlines the 5 basic steps you can take to protect yourself... under the law. Study them very carefully and use debt collection laws to YOUR advantage in dealing with debt collectors.
Ask the debt collector to send you written notice of the debt. This is your right under the FDCPA. The debt collector must send this to you within five business days of its initial phone call to you.
Review the debt collection notice carefully. You'll need to be able to answer these key questions:
- Do you owe the debt? If you are not sure, see the instructions below for disputing it.
- Is the amount correct? Debt collectors may inflate debts with fees and interest charges. These charges are regulated by state law, and sometimes they are illegal. If you think your debt has been inflated, you can dispute it and/or contact a consumer law attorney for help.
- Is the debt too old? Each state has a "statute of limitations" that determines how long a debt collector can sue to collect. In most states, this time period runs between 4 and 6 years from your last payment. If a debt is too old, you can send the collector a cease contact letter telling them not to contact you again. Bear in mind the statute of limitations does not apply to tax debt, child support, or student loans.
Send a cease contact letter if you believe that you do not owe the debt, or you believe that it is too old.
All you have to do is write the collection agency a letter stating that you believe the debt is too old, or you do not believe you owe it (whichever applies) and instruct them not to contact you again.
Send your letter by certified mail, return receipt requested and keep a copy for your records. You need good records in dealing with debt collectors.
After it receives your letter, the collection agency cannot contact you again except to tell you it received your letter, or to inform you of any legal action it will take against you.
Important! If you send a cease contact letter to the debt collector, you may be giving it no choice but to sue you. Call the FREE Collection Complaint Hotline at 888-694-5077 before taking action.
If you owe the debt but you cannot afford to pay it, set up a free consultation with a consumer bankruptcy attorney to find out if you are judgment proof.
In every state, certain property is "exempt" or safe from creditors. Disability income is often protected from creditors but it's a good idea to double check with an attorney.
If you have no property or income the debt collector can go after, then you may be "judgment proof."
You can find out whether you are judgment proof, and learn about your options for dealing with debts you can't pay, by talking with a consumer bankruptcy attorney. The consultation is usually FREE and will be confidential.
If you owe the debt but can't pay it in full, try to resolve it by negotiating a settlement with the collector to pay less than the full balance. Some collection agencies will accept a much smaller lump sum payment if you can come up with one.
Make sure you get the terms of any agreements in writing, and never give a debt collector your debit card number, your bank account information or give them permission to take money directly out of your bank account.
Tip: In dealing with debt collectors, it's a good idea to talk with a bankruptcy attorney first, as you may be able to use the fact that you have consulted with one as leverage in negotiating a settlement you can afford.
If you've followed the steps outlined above in dealing with debt collectors, you should end up in pretty good shape, at the very least better than you were when debt collectors were hounding you.
If the collection agency (or agencies) acted badly, you might even be able to sue. If you were to do so successfully, you may be entitled to damages and the collection agency may have to pay your legal fees as well.
For that reason, some attorneys will take your case on a contingent fee basis, which means they will get paid only if you win your case.
Need help right away dealing with a debt collector? Call the Collection Complaint Hotline. It's FREE and confidential! Call 888-694-5077. Or find out more about debt collection laws before you pick up the phone.
For more information on how to handle debt collectors, get Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights by Gerri Detweiler and Mary Reed.
Ability-Mission.org readers can pay whatever they can afford to purchase the e-book – as little as $1.99. Why do you need the advice this e-book contains?
We said that the FTC video on this page has advice that could get you an unwanted result. It says to send a letter to stop a debt collector from contacting you.
It is your legal right to do this, but did you know that it can trigger a lawsuit against you? This is because the debt collector will then have no other way to collect except to sue you. You don't want that!
Of course you can do things on your own, but as you see, it could get you in trouble. For this reason, we highly recommend that you get competent legal help. Start now with that free call to 888-694-5077.
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