Q: How far a collection company can go – legally -- to
collect a debt? There’s a company calling our family members and even our neighbors.
They’re looking for my son, who owes a debt. Is this legal? How can we stop
them? My son is away in school and unable to pay at this time. -- CE, via email
A: The quickest way to get the collection company to stop
calling is for your son to respond to them.
His first step should be to ask them to send him a written
statement that includes the amount they say he owes, the name of the creditor,
and the procedure he should follow if he thinks that in fact, he doesn't owe this
debt or has already paid it.
Everyone who gets a call from a collection agency should
request all this information in writing.
You’re legally entitled to receive it under the federal
Fair Debt Collection Practice Act.
The same law prohibits collection agencies from calling you
at home at ‘unreasonable’ times. That means they can’t call before 8 a.m. or
after 9 p.m.
The law also says they can't call you at work at any time
if you ask them not to.
It's also illegal for them to curse, insult or threaten you.
They are allowed to call your friends, neighbors and
relatives -- but only in order to locate you. They can't call these people
repeatedly. And unless they have your permission to do so, they can't tell
anyone except your spouse, lawyer, or cosigner that you owe a debt.
If a collection agency violates any of these rules, you
should complain to the New York State Attorney General's office (at 1-800-771-7755)
and/or to the Federal Trade Commission (at 1-877-382-4357). If you had the time
and the money, you could even hire a lawyer and sue a collection agency for
breaking the law.
To get creditors to stop calling you, you have to send them
a 'cease and desist' letter.
The letter should say that according to the Fair Debt
Collection Practices Act, you are requesting that they stop communicating with
you. You can explain your situation. (For example: ‘I recently lost my job and
can’t pay this debt until I find a new one.’) Be sure to include your name,
address, account number, and the name of the creditor.
The law says that after the collection agency receives that
letter, it can call you one more time to let you know what action it intends to
take in response.
Be warned: A cease and desist order doesn't excuse you from paying your debt. In fact, the response may be, ‘Okay, we’ll see you in
court.’
"Creditors have rights, too," says Heath Berger,
a Woodbury New York bankruptcy attorney. "They can sue you, and if they
get a judgment against you, they can garnish your salary, take a bank account,
or take your car and sell it to get their money."
If your son does owe this debt, the best solution may be for him to negotiate an agreement to repay it, perhaps in very small amounts over an extended period of time.
You don't say whether you and/or your spouse co-signed for your
son’s debt. If you did, you should know that the creditor can demand payment from you, says Anthony
Sabino, a Minneola New York bankruptcy lawyer.
Many people don't understand that a lender can collect from
anyone who signed the loan document. Or they assume that the lender will only
come after them as a last resort.
But co-signers often are the first target, not the last.
The reason is simple: They’re easier to collect from. The co-signer has financial
resources and a track record of paying bills. The primary borrower doesn’t; that's
why he needed a co-signer in the first place.
If you co-signed for a loan, the lender can sue you to
collect payment, win a judgment, and sell your assets to recoup what you owe.
So if you did co-sign for your son’s debt, you should pay it. And then you
should make
a written agreement with your son for when and how he will repay you.
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