The Fair Debt Collection Practices Act

By JIM C. KLEPPER
ITJ

10/15/2008

Dear Mr. Klepper:

The price of fuel is killing my trucking business, and the price of food is destroying my family’s ability to have adequate food on the table. Fall is almost here and my kids need new clothes and shoes to start school. My wife calls me all the time about money and the creditors keep calling threatening us with everything from repossessing our car and furniture, to sending me to jail because I do not have enough money to pay everyone and still keep fuel in the truck.

Can they really send me to jail for the money I owe? 

What can I do to get out of this mess and stop all the calls about money?

Bob M., Albuquerque, N.M.

Bob, first things first; they can’t send you to jail for owing money to a creditor, unless you lied or knowingly used false information on an application to the creditor.  Sending people to “debtor’s jail” was something the Pilgrims did when they first landed on the continent. “Debtors jail” has since been outlawed.

What can you do to get out of this mess? The first and quickest way is to cut your spending so you can develop a positive cash flow each month. Positive cash flow means you will have to find a way to make more money than you spend. I mean you really have to decide what expenses your family can cut and still remain safe and together. Really, the only people able to discuss these cuts with you are your family. You will need to sit down with the family and get their support on what you have to cut. This will not be easy or fun, but remember, you are fighting to save your family, home and car. No need to be homeless just because you will not cut out cable or eating out.

You could also speak with an attorney about declaring bankruptcy. Bankruptcy laws have recently changed, so make sure you talk to an attorney that does a lot of bankruptcy. Once you declare bankruptcy or hire an attorney, the creditors can no longer contact you, but are required to talk with your attorney. Bankruptcy isn’t always the best answer to a lack of money, but you can think of it as the nuclear bomb for the creditors, but it will still have a negative impact on your future ability for credit.

Many of the old ideas about just walking away from the debt have changed, and bankruptcy now will require you to pay off more of the debt you currently owe.  Your creditors can even force you into bankruptcy if you have assets, the debts and can talk a bankruptcy judge into court so they can sell your assets and collect their money.

To get creditors to stop calling you and manage the creditor calls is to know your rights under the Fair Debt Collection Practices Act.  Under the act, communication with the consumer is prohibited §805 (a) (1) at any unusual time or place but specifically before 8am or after 9pm local time; and (3) at the consumer’s place of employment if the employer prohibits such contact. (Most employers do prohibit such calls because it disrupts their business).

The act also prohibits harassment or abuse in § 806, A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.

(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.

(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency ...

(4) The advertisement for sale of any debt to coerce payment of the debt.

(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.

(6) Except as provided in section 804, the placement of telephone calls without meaningful disclosure of the caller’s identity.

Under § 807, a debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof.

(2) The false representation of—

(A) The character, amount, or legal status of any debt; or (B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

(3) The false representation or implication that any individual is an attorney or that any communication is from an attorney.

(4) The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment,

or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.

(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

(6) The false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to—

(A) lose any claim or defense to payment of the debt; or

(B) become subject to any practice prohibited by this title.

(7) The false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer.

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

(9) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court,

official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval.

(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.

(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to