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What are my rights if I have unpaid debts?

The Consumer Financial Protection Bureau (CFPB) reports that roughly 70 million consumers have been affected by debt-collection calls, and over one in four consumers who have been contacted by debt collectors felt that the communication was threatening. In order to establish rights for consumers, the CFPB passed the Federal Fair Debt Collection Practices Act (FDCPA). The act created several consumer protection laws that limit creditors actions when collecting debts.

Creditors are forbidden from threatening violence or harm, or even using profanity in their communications with you. They cannot publicly shame you, publish your name in connection with your debt, or discuss your debt with individuals other than you, your attorney, or your spouse. They also cannot pretend to work for a government or consumer reporting agency or threaten to have you arrested. Creditors are required to truthfully identify themselves.

Consumers have the right to ask debt collectors to stop contacting them, which may seem fruitless when you consider the data. The CFPB reports that forty percent of individuals surveyed who carried unpaid debts reported that they asked their creditors to stop contacting them. Of those, three out of four individuals who made the request did not have their wishes respected. You also have the right to not be bothered by a creditor at inconvenient times or contacted at inconvenient places, like your place of employment, without your written permission. And creditors are not allowed to contact you between the hours of 9 p.m. and 8 a.m., unless you have allowed it.

If you believe you are being harassed by a creditor or debt collector, you have the right to demand that they stop. You may send a Cease and Desist Letter as a more formal attempt to deter harassment. While it may seem intimidating to push back against creditors, you have the right to do so and no one deserves to be harassed.

What is required from a debt collector when they contact you?

The CFPB requires creditors who contact consumers with unpaid debts to truthfully tell the consumer who they are, how much money is owed, to whom the money is owed, and how the consumer can make a payment. The law requires creditors to provide you with their contact information, if you request it. Creditors must also inform the consumer of their right to offer a dispute letter within 30 days of the communication. If any of this information is not included in the creditor or debt collector’s first contact with the consumer, the creditor can face penalties if they do not immediately send a written notice containing the information.

It may benefit you to carefully consider the legitimacy of the creditor who is contacting you. Debt collection scams are on the rise, and scam reports are among the top consumer complaints reported to the Federal Trade Commission (FTC). To protect yourself from falling victim to a debt collection scam, avoid sharing personal or financial information with anyone who contacts you and claims to be a creditor. If you suspect the entity or person contacting you may be attempting a scam, report the incident to your state’s Attorney General’s office.

When you know the debt is legitimate, some creditors may agree to negotiate the amount to a lower more manageable sum that you can afford. If you choose to do so, be careful that you do not sign any documents that require you to pay the rest of the sum at a later date, or allow the creditor to later sue you for the remaining amount.

In brief: Yes, there is a legal time limit, formally known as a statute of limitations, on consumer debt. A statute of limitations is a law that sets a limit on the amount of time someone (or an entity) has to file a legal claim for an alleged offense. In the case of a debtor or creditor, this means that deadlines are placed on when they must file a lawsuit to collect debt. After the deadline has passed, a creditor may not be able to collect payments owed.

The applicable statute of limitations varies depending on the type of debt incurred, as well as the state you live in. Some statutes of limitations can be as long as fifteen years in Ohio or as short as three years in Delaware. Creditors cannot sue consumers for unpaid debts after the relevant statute of limitations has passed. Generally, the statute of limitations begins at the time you made or missed your last payment, or when you last affirmed the debt. Creditors, however, often try to contact consumers in an attempt to recover the debt after they can no longer sue to enforce it.

If you have been contacted about an old debt, you may want to ask a lawyer about your options.

What are my options if I am sued by a debt collector?

It is important to respond to a lawsuit if you are sued, rather than simply ignoring it. If there is no response to a debt collection lawsuit, you may lose by default. The very first thing you may want to do is figure out your deadline for filing a response in court. It can often be helpful to talk to an attorney as soon as you are served with any lawsuit.

If you have received notice that you are being sued by a debt collector, you may want to verify your timeline of events. When did you agree to the debt, and when did you make payments towards it. You may also want to ensure that the statute of limitations has not passed in your situation and that the debt collector has contacted you in a timely manner.

Next, you may want to request information about your purported unpaid debts. You can accomplish this by sending a Debt Validation Letter. Creditors and debt collectors are required to respond and provide you with information about your debt. If they fail to do so, you may be able to challenge the debt.

If the debt is legitimate, you may consider asking the creditor about the potential for a payment plan. Making payments on your debt and working with the creditor to accomplish a full payment over time may help keep a lawsuit at bay.

Lawsuits are certainly intimidating for everyone. Do not forget to consider all of the options available to you, such as settling out of court or, for larger debts, declaring bankruptcy. If you do not wish to go to court, these may be attractive options for avoiding the time and expense of litigation. A Settlement and Release Agreement can help you end the lawsuit quickly. If that is not viable, you also may have the option of filing for bankruptcy. If you are thinking about filing for bankruptcy, a Bankruptcy Form can help you organize the necessary information.

If you have more questions about debt collectors contacting you, or if you are facing a debt collection lawsuit, reach out to a Rocket Lawyer network attorney for affordable legal advice.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.


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