What Are Debt Collection Laws?
If you have fallen behind on your mortgage or other loans, you should know that federal and New York state laws limit what debt collectors and creditors can do to press you to make payments.
The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits debt collection companies from using abusive, unfair, or deceptive practices to collect debts. The New York State Debt Collection Procedures Law provides similar protections against creditors who may contact you directly about a debt you owe them.
Consumers may sue debt collectors for violations of federal regulations, and New York State can impose a civil penalty of $5,000 per violation of the state law. Further, a violation of New York’s regulations can amount to or serve as evidence of a violation of the FDCPA.
If you are struggling to pay your debts and are being harassed by a debt collector, you should speak to a bankruptcy attorney to stop the damage creditors, and debt collectors can do. New York bankruptcy lawyer Michael H. Schwartz, P.C. has earned a reputation as the most aggressive attorney in the Hudson Valley when standing up to overzealous debt collectors. He can stop creditors and debt collectors from harassing you or foreclosing on your home and help you take steps to get your finances in order.
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What are Debt Collectors Legally Allowed to Do?
There are two types of debt collectors:
- Firms that collect debts owed to third parties. Debt collectors buy debts from the original creditor, and the creditor pays them a percentage of the amount they collect.
- Creditors or firms that loan money or extend credit for purchases. A creditor’s contract with the borrower may allow them to seize any of the debtor’s real assets if they fail to repay the loan. Creditors have restrictions in New York similar to those placed on debt collectors.
A debt collection agency may contact you in person, by telephone, or in writing
but must disclose the purpose of the contact. If the collection agency phones, it must be between 8 a.m. and 9 p.m.
If a debt collector is unable to contact you directly, the debt collector is allowed to contact other people, such as neighbors, relatives, friends, and employers, to reach you. They cannot say why they are trying to contact you or how much you owe.
A debt collector cannot contact you at work unless they do so during nonworking hours. They must stop calling you at work if you tell them your employer disapproves of their calls.
A debt collector must prove that you owe the debt they’re attempting to collect by presenting a validation letter, which outlines what the debt is, how much you owe, and other information. If you request a verification letter to get more information, they must provide that as well.
To get debt collectors to stop telephoning you, send a letter by certified mail telling them to stop calling your home and your place of work. Keep a copy of the letter for your records.
What Are Unfair Debt Collection Practices?
Debt collectors may not harass a debtor or anyone else over the phone or through any other form of contact. A debt collector may not:
- Communicate with you about debt by postcard
- Use any language or symbol on an envelope for correspondence with you (other than its address) that indicates it is a debt collector
- Use a false business name
- Make misrepresentations about the debt, including the amount owed
- Try to collect charges in addition to the debt unless they are allowed by the contract or state law
- Advertise your debt for sale
- Use obscene or profane language
- Use or threaten violence or criminal means to harm you
- Threaten to have you arrested
- Threaten to communicate false credit information about you to any other person
- Threaten to do things that cannot legally be done, or threaten to do things that the debt collector has no intention of doing
- Falsely claim to be a government representative or an attorney
- Falsely claim they will seize, garnish or sell any property or wages unless such action is lawful
- Falsely charge that you have committed a crime or that you will be arrested or imprisoned
- Falsely claim that papers resembling official documents are from a court or governmental agency
- Falsely claim that the debt collector is employed by a credit bureau.
What Happens If I Ignore A Debt Collector?
If you ignore a debt collector who is trying to collect on a debt that you are not paying, your problem will only get bigger. If you do not pay anything, interest on the debt will compound and you will owe more. A debt collector or creditor may eventually file a lawsuit against you, especially if they believe you have income or valuable assets they can seize. Declaring bankruptcy is an option if your debts have become overwhelming. There are three types of bankruptcy – Chapter 7, Chapter 11 and Chapter 13. Attorney Michael H. Schwartz can guide you through the proper oath to take if bankruptcy is an option.
If you are behind on your mortgage payments and realize that it will be difficult to catch up on the payments, contact attorney Michael H. Schwartz for a consultation about your options. A lender may start foreclosure proceedings after a borrower falls three months behind on payments.
If you are served with legal papers advising you of a lawsuit, you should not disregard the lawsuit. It is important that you respond, even if you don’t owe any money. If you fail to respond, the court will eventually enter a default judgment against you and the creditor may be allowed to freeze your bank account, garnish your wages or foreclose on your home.
To respond properly, you will need to consult an experienced bankruptcy attorney.
You Need to Contact a Law Firm Specializing in New York Bankruptcy
If you are struggling to repay debt and are hearing from debt collectors, it’s time to take action. Your first step should be to get trusted legal guidance. The bankruptcy and foreclosure defense law firm of Michael H. Schwartz, P.C. in White Plains, NY, can help you seek debt relief, including an end to calls from debt collectors.
Attorney Michael H. Schwartz has assisted thousands of New Yorkers and can help you make a fresh start toward a financially stable future. Contact us now for a consultation.
Michael H. Schwartz is the largest filer of bankruptcy cases for people living in Westchester and Rockland counties in New York. A graduate of New York Law School, Michael has been licensed to practice in New York State courts since 1983. He is also licensed to practice in the U.S. Bankruptcy and District Courts for the Southern, Eastern and Northern Districts of New York and the District of New Jersey as well as the Second Circuit U.S. Court of Appeals. He is a graduate of Max Gardner’s Bankruptcy and Veterans’ Boot Camps. Several media outlets have reported on his cases or sought his insights, including The New York Times.
