Fairy Enchantress

Info for newbies (FAQ-style)

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Which debts are covered under the Fair Debt Collection Practices Act (FDCPA)?Debts that arise from purchasing a good or service for personal, family, or household purposes are covered under the FDCPA. The purchase does not have to be from a credit transaction, such as buying something with a credit card, and a judgment against a consumer is not required for a debt to be covered under the FDCPA.

Debts that arise from purchasing a good or service for business purposes is not covered under the FDCPA. Other forms of debt, such as certain unpaid taxes, fines, and tickets, as well as property tax assessments also are not covered under the FDCPA. Similarly, tort claims, past-due child support, alimony, and other support payments are not considered debt under the FDCPA.

Who is a debt collector?

The FDCPA defines a debt collector as any individual or entity whose primary business purpose is the collection of a debt owed to another and whose communication methods include calling the consumer via telephone and/or sending the consumer collection letters through the mail. Thus, almost all third–party collection agencies and collection attorneys are considered debt collectors under the FDCPA.

A number of individuals and business are not considered a debt collector under the FDCPA even if those parties may collect debt. The following are likely not debt collectors under the FDCPA:

A creditor collecting its own debt;

Employees of the creditor or a third-party debt collector collecting in the name of the creditor;

A person who acts as a debt collector for another person where both are related by common ownership or control and the person’s principal business is not debt collection;

Any officer of employee of the United States collecting in performance of her official duties;

Process servers, including sheriffs, marshals, police officers, or any other individuals fulfilling their normal duty as a process server;

Non–profit organizations which provide consumer credit counseling services and assist in the liquidation of consumer debts; and

Any individual or entity collecting or attempting to collect a debt not in default at the time it was obtained.

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Are original or "first party" creditors subject to the Fair Debt Collection Practices Act (FDCPA)?

Generally they are not. Creditors collecting their own debt in their own name are typically excluded from the definition of debt collector. However, a creditor collecting its own debt by using a different name that suggests to a consumer a third party is collecting or attempting to collect that debt, then the creditor may be a debt collector under the FDCPA.

Officers and employees of a creditor using the true name of the creditor while collecting or attempting to collect debts owed to the creditor are also not subject to the FDCPA. For example, an person employed by the creditor as an in–house collector is exempt from the FDCPA if she acts in the name of the creditor and notifies the consumer that she is collecting the debt as an employee of the creditor.

Are attorneys subject to the FDCPA?

A debt collector is any individual or entity whose primary business purpose is the collection of a debt owed another and whose communication methods include calling the consumer via telephone and/or sending the consumer collection letters through the mail. Any person or entity, such as a lawyer or law firm, who regularly collects debts owed, is a debt collector under the FDCPA.

Although the FDCPA does not define the term “regularly,” the term is intended to include those who participate in debt collector for others in the ordinary course of business. This would not include persons who collect debts for others occasionally.

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Communicating with a Consumer About a Debt

When a debt collector contacts me for the first time, what are the rules he or she must abide by?

A debt collector must provide the following statement to you when sending you the first written communication (usually a letter): “This is an attempt to collect a debt and any information obtained will be used for that purpose.”

This disclosure is commonly known as the Mini–Miranda. If a debt collector’s first communication with you is an oral communication, such as a telephone call, then the above disclosure must be included during that conversation and the first written letter you receive. The debt collector must provide you with this disclosure even if you were the one contacting the debt collector for the first time.

In addition, any communication after the first written communication must disclose to the consumer that the communication is from a debt collector.

Many states also have their own special requirements for oral and written communications between collectors and consumers.

How do I stop collection calls?

A debt collector must stop communicating with you if you send the collector a letter in writing that either requests the collector cease communication with you or that you refuse to pay the debt.

If you wish to send notice for the collector to cease communicating with you, you must send the request directly to the collector, and NOT the creditor. Remember, the request to cease communication must be in writing.

Also, once the debt collector receives your request to cease communication, the collector must also cease communication with your spouse, parent (if consumer is a minor), guardian, executor, or administrator.

Once the debt collector receives the letter, she may not communicate with you with respect to the debt in question, except to: (1) tell you the collector is stopping all collection efforts; (2) tell you the collector or creditor may invoke specified remedies (such as filing a lawsuit) that the collector or creditor normally invokes; or (3) where applicable, tell you the collector or creditor intends to invoke a specified remedy (such as filing a lawsuit).

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How do I get debt collectors to stop calling me about a bill I already paid (or settled) years ago?

Respond in writing and provide documents showing the account has been paid or settled in full.

When can a debt collector call a third-party?

The Fair Debt Collection Practices Act (FDCPA) recognizes the need for a debt collector to occasionally contact a third party to seek the consumer’s whereabouts. Therefore, a debt collector may contact a third party, such as the consumer’s neighbor, friends, relatives or employer, for the purpose of acquiring location information of a consumer. This practice is commonly referred to as skiptracing.

A debt collector may only speak with a third party to obtain or correct location information, which includes the consumer’s home address, home telephone number, and place of employment. A debt collector cannot speak with a third party for any other reason unless the consumer has provided consent.

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In attempting to obtain location information, a debt collector may not communicate with a third party more than once unless the person requests the debt collector contact her again or if the debt collector reasonably believes the response was erroneous or incomplete and the third party now has correct or complete information. Therefore, if the debt collector believes that the third party’s response was incomplete, but has no reason to believe the person now has updated information, the debt collector may not contact the person again.

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When a debt collector attempts to obtain or correct location information about a consumer from a third party, she must identify herself and inform the third party she is correcting or confirming location information regarding the consumer. The collector may not reveal the name of her employer unless specifically requested by the third party. A debt collector can never disclose the existence of the consumer’s debt to a third party.

When a debt collector contacts a presumed employer to verify a consumer’s employment, the debt collector may only request that the company verify whether the consumer is currently employed by the company. The debt collector cannot request the consumer’s work phone number, supervisor’s name, dates of employment or any other information.

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What does "acquiring location information" mean and include?

In order to locate consumers who may have relocated, debt collectors are allowed to acquire location information from third parties that may have key information concerning the consumer’s location.

A debt collector may only speak with a third party to obtain or correct location information, which includes the consumer’s home address, home telephone number, and place of employment. A debt collector cannot speak with a third party for any other reason unless the consumer has provided consent.

When a debt collector attempts to obtain or correct location information about a consumer from a third party, she must identify herself and inform the third party she is correcting or confirming location information regarding the consumer. The collector may not reveal the name of her employer unless specifically requested by the third party. A debt collector can never disclose the existence of the consumer’s debt to a third party.

When a debt collector contacts a presumed employer to verify a consumer’s employment, the debt collector may only request that the company verify whether the consumer is currently employed by the company. The debt collector cannot request the consumer’s work phone number, supervisor’s name, dates of employment or any other information.

Debt collectors keep calling for my former roommate, neighbor, relative or someone I don't know. How do I get them to stop calling?

A debt collector generally may not discuss a consumer debt with the consumer’s employer and coworkers, friends, neighbors, and relatives (excluding the consumer’s spouse).

Therefore, a debt collector may contact a third party, such as the consumer’s neighbor, friends, relatives or employer, for the purpose of acquiring location information of a consumer. This practice is commonly referred to as skiptracing. This is the only reason a debt collector would have to contact a third party.

In attempting to obtain location information, a debt collector may not communicate with a third party more than once unless the person requests the debt collector contact her again or if the debt collector reasonably believes the response was erroneous or incomplete and the third party now has correct or complete information.

Therefore, if the debt collector believes that the third party’s response was incomplete, but has no reason to believe the person now has updated information, the debt collector may not contact the person again.

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Can debt collectors discuss my debt with my spouse?

Yes, under federal law. A debt collector should make sure that communication with a spouse, who might not be liable for the debt, is permitted under state law.

Can debt collectors discuss my debt with my children?

No, unless the consumer gives prior consent.

What rights do I have when a debt collector demands a post-dated check payment?

Debt collectors are not prohibited from accepting post-dated checks or other forms of payment, but collectors are prohibited from misusing post-dated payments.

If a debt collector receives a check or other payment that is post–dated by more than five days, the collector must send a written notice to you three to ten days before depositing the check or payment. The notice is meant to remind you that you wrote the check so she can make sure your account has sufficient funds to cover the face amount of the check.

If the collector receives a series of post–dated checks where one is to be cashed each month, the collector must provide the above notice before depositing each check.

State law may also state how collectors can request post-dated payments from consumers.

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Can debt collectors add surcharges (interest, fees, charges or expenses) to the original debt?

Debt collectors may only collect surcharges to the original debt if collection of those surcharges is expressly allowed in the agreement that created the debt or allowed by law. This applies to the collection of interest, service charges, collection charges, late fees, bad check handling charges, and any other incidental charges.

State law may address whether, and how, a debt collector may collection additional fees and charges. The collector does not always need to have a written contract in order to have an agreement with the consumer regarding the collection of additional fees.

If a debt collector offers to accept payments via electronic methods or by credit card, it may not be a violation of the FDCPA if those fees are voluntarily chosen by the consumer as a payment option, and the fees are charged by the independent entity or business processing the fee.

Can debt collectors demand full payment even though they know the agency or creditor will in fact accept partial payments?

Yes. A debt collector may ask for payment in full. However, a debt collector should not represent that only payment in full may be accepted when the collector knows that partial payments are accepted.

Can debt collectors refuse to accept a reasonable payment plan?

There are no laws or regulations which require creditors to accept or agree to a repayment plan. Debt collectors are required to submit all “reasonable” offers to their client (the creditor), but, the creditor is not required to accept or agree to a repayment plan. If a creditor or debt collector refuses to accept or agree to a repayment plan, they do not give up their right to collect on the debt, and the debt does NOT go away.

Can debt collectors request my Social Security Number?

A debt collector is not prohibited from requesting you to verify your Social Security number. It is common practice for debt collectors to verify Social Security numbers in order to ensure they are speaking with and/or collecting from the right person.

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How do I dispute a debt?

There is a difference between disputing a debt and requesting verification of a debt. To dispute a debt, you can inform the debt collector you are disputing a debt verbally or in writing. However, if you tell a debt collector you dispute a debt verbally, such as over the telephone, the collector is not required to verify that the debt exists and provide you that information.

If you wish to dispute a debt and want the debt collector to verify the debt, you must inform the debt collector of your request in writing. Your written request does not have to use the word “dispute” to require the collector to verify the debt, but the request must clearly show that you are contesting the debt.

Also, although a debt collector can choose to provide verification to you anytime you request it, a collector is required to respond to your request for verification if you provide it to the collector within 30 days of the date you receive the validation notice. A debt collector does not have to respond to your request for verification if you send it after this thirty day period.

How are debt collectors required to respond to my dispute if received after the initial 30-day validation period?

A debt collector is required to respond to your request for verification if you provide it to the collector within 30 days of the date you receive the validation notice. This time period is commonly known as the “validation period.” Untimely requests for verification are sometimes furnished both before and after the validation period. A debt collector does not have to respond to your request for verification if you send it after this thirty day period.

A debt collector is not required to respond to your written request for verification if sent the request before debt collector has sent the validation notice. One example of this is if you discover that a collection agency has reported a debt to a consumer reporting agency (CRA) but has not yet sent a validation notice. Because the validation period begins only after the consumer’s receipt of the validation notice, verification requests submitted prior to that time are not binding.

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What are debt collectors required to send as verification of a debt?

A debt collector is required to obtain verification of the debt, or other information such as: (1) a copy of the judgment; (2) name and address of the original creditor. The collector must send the consumer a copy of this information.

The debt collector can obtain verification from the creditor that the amount demanded is the amount owed by the consumer from whom the collector is attempting to collect. If the consumer disputes a certain portion of the debt, or if multiple debts are involved, or if the debt includes interest or fees that have been added, an itemization may be required, which means the collector needs to list all the amounts being collected, including the original amount due and other fees.

How must collectors verify a debt and who is supposed to mail the verification to me?

In order to verify a debt, a debt collector is required to obtain a copy of such verification or judgment and mail it directly to the consumer. The FDCPA does not require that a debt collector send verification by certified or registered mail.

I disputed a debt but never heard back, I thought collectors had to verify debts?

If you request in writing verification of a debt within 30 days of the date you receive the validation notice, the debt collector has two options. She can either provide verification of the debt and continue collection activity or she can stop collection activity until she provides you with verification of the debt.

Sometimes, collection activity is halted and the account is returned to the original creditor or cancelled. In that case, if the debt collector never resumes collection activity on that debt, the collector is not required to provide verification of the debt to you.

It is important to note that the Fair Credit Reporting Act has other requirements for debt collectors who report a debt to a consumer reporting agency (CRA). Under the FCRA, debt collectors have to investigate a debt that is disputed within 30 days from receiving the request to investigate the debt if the request is sent by the consumer directly to the debt collector. The FDCPA does not limit the time in which a debt collector must verify a debt.

The FDCPA does require, however, that a debt collector, when receiving a dispute during the 30-day validation period, to stop collecting a debt or any part of the debt that is disputed. The collector must stop collection until verification is mailed to the consumer.

If a debt collector did not validate my debt following a dispute, what rights do I have if the debt collectors starts collections at a later date?

If a consumer requests verification of a debt within 30 days of their receipt of the validation letter from the collector, the collector may either (a) provide verification and resume collection activity, or (B) cease collection activity until verification is furnished. Sometimes, collection activity is halted and the account is returned to the original creditor or cancelled. In that case, if the collector never resumes collection activity on that debt, the debt collector is not obligated to provide verification.

If a debt collector wishes to resume collection efforts a year after receiving a dispute, and the dispute was received within the 30–day validation period, they must validate the debt before resuming collection efforts. If a creditor pulls an account from one collection agency and places it with a new collection agency you would be required to send in your dispute again once you receive the validation notice.

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Can debt collectors demand payment or take legal action during the 30-day period for disputing a debt?

Yes. The 30–day validation period allows the consumer time to dispute the alleged debt. A debt collector is permitted to pursue collection activity, including filing suit, unless the consumer provides a written request to the debt collector to verify the debt. Once a debt collector received the written request for verification, the collector must stop all collection efforts until verification is mailed to the consumer.

If I incurred debt in one state and then moved to another, which state laws apply?

It depends on the issue. The contract creating the debt may say which state law applies with respect to certain issues, but state law in which you now reside generally applies with respect to how a debt collector must communicate with you.

Can debt collectors continue attempts to collect a debt after the statute of limitations period has expired?

Statutes of limitation concern the amount of time within which a lawsuit may be filed against a consumer to collect a debt. Each state has its own statute of limitations, and the time frame may be different if the contract creating the debt is in writing, is verbal, or if the debt is a credit card debt or other kind of debt.

Statutes of limitation start running usually on an account’s last activity. Statutes of limitation may also stop and can be revived, depending on state law, with a partial payment or a written promise to repay the debt. In addition, the statute of limitations is often suspended if a consumer leaves the state, resides within the state under an assumed name, or is incarcerated.

Debt collectors cannot threaten action they are not legally allowed to take or do not intend on taking. In the instance of an account where the statute of limitations has expired, the FDCPA does not prohibit a collector from requesting payment on the debt, but the collector cannot threaten the consumer with legal action because the collector can no longer sue the consumer for the debt.

How long does it typically take for an action to appear on my credit report?

It can take 60 to 90 days for an action reported by a data furnisher to appear on a credit report.

Are debt collectors required to remove a tradeline from my credit report if they receive a dispute notice?

No. If a debt collector who provides information to CRAs receives a valid notice of a dispute directly from you, then the debt collector must take four steps. The debt collector must: (1) conduct a reasonable investigation with respect to the disputed information; (2) review all the information provided provided by you in your notice of dispute; (3) complete the investigation and respond to you within thirty days of receiving the dispute; and (4) if the investigation determines that the disputed item of information is inaccurate, the collector must correct the inaccuracy with each CRA to which the collector has provided the inaccurate information.

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Are debt collectors allowed to report debts to a CRA during the 30-day validation period?

A debt collector may report a debt to a CRA within the 30-day validation period before she receives a request for validation or a dispute notice from the consumer.

Are debt collectors allowed to report debts to a CRA after receiving my dispute letter but before validating the debt?

An FTC informal staff opinion holds a collector may not report or continue to report a debt after a written dispute is received within the validation period until verification of the debt is sent to the consumer. Once verification has been sent to the consumer, the item may again be reported to a consumer reporting agency. The item must be reported as disputed.

Can debt collectors report my spouse's debt on my credit report?

It depends on the laws of the state you reside in. To find out what the law in your state requires, check with a local attorney.

Where can I find information about my credit reports and improving my score?

Visit the Federal Trade Commission Web site “Facts for Consumers."

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Can my employer fire me because my wages are being garnished?

No; It is illegal for an employer to terminate or take negative action against an employee due to a wage garnishment.

Are funds from disability/Social Security subject to garnishment?

Generally, Social Security and disability benefits are not subject to garnishment. However, Social Security and disability benefits may be subject to garnishment or attachment for certain government education (student) loans.

What is disposable income?

The general definition of “disposable income” is the amount left after income tax deductions that is available to divide between spending and personal savings.

Can a debt collector file a lawsuit against me?

Generally, yes. State statutes and case law govern the assignment of claims and may provide authority for collectors to bring a lawsuit against you. If state law authorizes the right of assignment or authorizes the collector to file a suit on behalf of the original creditor, the collector may do so if the debt collector has entered into a legally binding assignment.

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Where can a debt collector file a lawsuit to collect a debt?

Debt collectors may bring a legal action against a consumer in the state in which the consumer signed the contract creating the debt or the state in which the consumer resides when the legal action is filed. There are exceptions, such as if the lawsuit is to enforce an interest in real property.

What is a default judgment?

Default judgment is defined as a judgment entered by a court after an entry of default against a party for failure to appear, to file a pleading, or to take other required procedural steps. In summary, a judge may enter a default judgment against a consumer in favor of the debt collector or creditor if the consumer fails to defend herself in court.

What does “judgment proof” mean?

“Judgment proof” is a term commonly used by consumers and consumer attorneys when a consumer has defaulted on his or her debt(s) and does not have the income or assets to repay the debt(s). Judgment can still be obtained by the creditor or debt collector. The term merely refers to the fact that if a consumer has no income or assets, there is nothing to collect against the judgment. Being “judgment proof” does not protect you from a creditor or debt collector filing or obtaining a judgment against you.

Can debt collectors add interest to judgments?

Yes. Each state has individual laws governing the percentage of interest that can be added to judgment accounts.

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Am I responsible for my spouse's debt(s)?

State requirements established in statute or case law determine if a spouse may be held liable for providing the “necessaries” of life (food, clothing, shelter, medical care, or education for minor children) to the other.

These requirements are based on the common law “doctrine of necessaries,” a rule of law which first emerged in the courts of England more than 300 years ago. From its beginning, the doctrine allowed a wife to buy her necessaries on her husband's credit even if the husband had refused or neglected to provide for her necessaries. The common law served to protect married women from spousal neglect since the laws prohibited them from owning property, entering into contracts or receiving credit on their own behalf. Like other common–law principles, the “doctrine” was transplanted from England and was applied in the United States.

Many states have taken the original doctrine and have expanded its scope. In most instances, state statutes or court decisions have established that both spouses are liable for the debts of the other, when those debts were incurred to provide “necessaries.”

What happens to me when my spouse/ex-spouse files bankruptcy?

If your name is on the account or state law says you are jointly responsible for the debt, when your spouse or ex–spouse files bankruptcy you will become the primary person responsible for the repayment of the debt. A divorce decree does not legally alter who is responsible for the repayment of a debt, only who (per the divorce decree) who is suppose to repay the debt.

Why wasn't I notified when a joint debt (with an ex-spouse) became delinquent?

Generally, this happens when a debt collector only has one address. Typically a creditor only has the joint address which was current before the divorce. If you did not change your address with the creditor, they probably had no reason to know or assume you no longer reside at the same address as your co–obligor or ex–spouse.

When is a debt legally considered to be delinquent?

The Federal Trade Commission (FTC) holds that the default of a debt is controlled by the terms of the contract creating the debt and applicable state or federal law.

If a state or federal law does not provide when an account is in default, the FTC and courts look to the contractual agreement between the original creditor and the consumer creating the debt to determine when an account is in default. Where a debt is created without a contractual agreement, the FTC and the courts may look to the creditor's reasonable written guidelines to determine when an account is “in default.”

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What does “charge-off” mean?

Dictionary.com gives the following definition for “charge–off”:

“A debt that is deemed uncollectable and written off. Also known as a bad debt.”

When a debt is charged–off it does not mean that it goes away. Generally, creditors charge–off an account shortly before or right after sending it to a debt collector. Charged–off means the debt is bad, that the account is no longer open and active.

What can I do if I believe a debt collector has broken the law?

If you believe a debt collector has violated the Fair Debt Collection Practices Act (FDCPA), you can sue the collector under the Act. The FDCPA allows a consumer one year from the date the supposed violation occurred to suit against the debt collector for a violation of the FDCPA.

State laws regulating debt collectors may also allow you sue a debt collector for alleged violations of state law.

How do I report a violation or file a complaint?

Violations or complaints (federal or state) can be reported to your attorney general's office, the Federal Trade Commission and/or ACA International.

· ACA International [link to http://www.acainternational.org/consumers]

· Your state Attorney General’s Office [link to http://www.naag.org/attorneys_general.php]

· Federal Trade Commission [link to http://www.ftc.gov] Bottom of Form

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Hello All,

i m very glad to visit this forum as i got sufficient details and i would like to get more of it in future.

thanx

celina

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