Things you need to know about debt collectors

By Valentine Smith

Having a debt is one of the most unpleasant things you can experience. Does not matter if you owe money to a bank or to payday lenders online, debt collectors always take place when it comes to irresponsible customers.

Of course, there are plenty of reasons regarding why one is not capable of making payments. In order to be ready for these people everyone has to know certain terms and regulations. A lot of debt collectors simply break law and we may not even know this.

  

The FDCPA - The Fair Debt Collection Practices Act- it is the federal law that manages collections for household, personal and family debts ( mortgages and car loans, credit cards, student loan debt and utility bills that are past due, insurance and medical debt).

The FDCPA has an association with outside deferred collectors of debt, anyhow not to a bank's particular in-house duty authorities (importance deferred payment gatherers who are representatives of a lender).

Law regarding debt collectors may have difference according to your state. It may even be way tougher than the federal regulations. A person is going to need to contact a general office of the state’s attorney to find out more specific information.

            

Here is the list of what the FDCPA collectors are not allowed to do:

It is no allowed for them to contact you before 8 am or after 9 pm. They can only do this if you give permission to do so. You have a right not to talk to them at all.

They cannot: 

• Call you on Sunday.

• Call or somehow get in touch with your friends, family and even neighbors trying by embarrassing you in front of them make you pay off the debt.

• Call you at work if the collector of debt is informed that your boss doesn’t want you to be reached in the middle of working hours.

• Contact your current employer regarding owed debt, only if past-due child support is the case.

• Communicate via postcard.

• Use language or symbols indicating the business of the debt on or within mail.

• Constantly call you within short period of time. It is considered to be a harassment, which makes it illegal per the FDCPA.

• They cannot threaten you in any way: For example, they may not mention jail or insult you with bad words.

• Try to collect more than you actually owe. Only in one case they can do this: if you creditor allows collectors to do that.

Be careful with debt collectors; make sure you know your rights to avoid nasty situations.

Valentine Smith is a financial consultant at PaydayLoans@ Online Company wants to tell you how to deal with debt collectors.

Steps for filing a class action lawsuit

By Christina Sanders

Filing a class action suit is a common way for plaintiffs to seek redress without having to dedicate the time and money of an individual lawsuit. These suits often seek to force a corporation to change an illegal or unethical practice that has affected many people. For example, a class action lawsuit was brought against Unum for illegal practices within its disability insurance claims process.

Unfortunately, class action suits can also be lengthy and complicated. To simplify this process, here are the basic steps a class action suit will take according to Class Action America.

1. The attorney or firm representing the plaintiffs files a suit with the court.
2. The defendant is then given time to respond to the filing. Often they will try to have the case dismissed or offer some other kind of legal pleading.
3. After both sides have filed, they spend time collecting evidence supporting their claims. The sides usually share this evidence with each other in order to convince the opposing side that they won’t win the case.
4. In order to qualify as a class action suit, the plaintiffs must apply for certification with the courts. The defendants can also file evidence opposing the certification. If the courts approve the certification, the lawsuit proceeds. If the certification is not approved, the lawsuit must continue on as an individual suit.
5. Once a class action lawsuit is approved, potential plaintiffs are notified of the opportunity to participate in the suit or are given the option to file an individual complaint. This is the step most of us are aware of because we receive a letter in the mail or see ads on TV asking us to seek compensation for damages.
6. If a court rules in favor of the plaintiffs at trial, the cases are almost always appealed to a higher court.
7. Sometime during the court process a deadline is set for plaintiffs to join the class action suit.
8. Once a case is ruled on, plaintiffs are rewarded damages. The amount usually varies based on who was affected the most, the total sum of money and the number of people participating in the case.
9. Of course, anytime during these proceedings a case may be dismissed. Plaintiffs may decide to drop the case, or the courts may order the case to be dismissed based on the evidence presented. Occasionally, a suit may be filed at a later time depending on the circumstances of the dismissal.

Christina Sanders writes for several blogs nationwide. To learn more about Unum Class Action Lawsuit visit here.

Financial instruments and accounts that provide protection from creditors

Creditors are limited by laws that protect consumers even if those consumers are late on their bills or are sued for liability compensation. Examples of these laws are state statutes of limitations, and federal credit protection laws such as the Consumers Credit Protection Act.

Despite consumer protection from creditors, these laws do not necessarily protect individuals from liens or seizing of assets by the Internal Revenue Service (IRS) or from specific court rulings.  Having said that, several types of financial instruments and accounts protect consumers from creditors allowing an opportunity to keep retirement savings safe from difficult financial situations. 

Homesteads 

Homesteads are a type of property rather than a financial instrument, but they can also provide financial safety from creditors according to The Coleman Law Firm. Moreover, the Coleman Law Firm states the Homestead exemption provides asset protection for land 160 acres or less in size. The following state exemption chart at Creditor Exemption outlines which states allow homestead exemptions. 

Insurance

Both Ginger Applegarth of MSN Money and Attorneys at Law Unrah, Turner, Burke and Frees appeal to cost effective insurance solutions to asset protection. Namely, auto, and homeowners insurance are able to protect assets from liability lawsuits for less than asset protection insurance and in terms of creditor claims, term life insurance also provides more cost effective financial security. However, it is probably a good idea to keep in mind life insurance financial protection is limited. This limitation is elaborated by Gideon Rothschild and Daniel S. Rubin of Moses & Singer LLP.  For example, although Title 11 of the U.S. Code does protect assets from creditors, the focus is beneficiaries or dependents and not owners.

Trusts

Trusts are a type of legal entity used in estate planning and are often considered financial instruments used to protect assets. Cornell University Law School  describes Trusts as right to property via a fiduciary relationship i.e. not ownership but retention of rights of ownership. Several types of trusts exist, and according to Estate Street Partners, LLC an irrevocable asset protection trust combined with a limited liability corporation provides 'fortress' like asset protection. Several kinds of Trusts can be used for protection according to the Law Offices of Janet Brewer Moreover, of those discussed are Qualified personal residence trusts, irrevocable life insurance trusts and inter-vivos qualified terminable interest property trusts.

IRAs

Individual Retirement Accounts or IRAs are another financial instrument that protect consumers from creditors. However, according to the New York Times,  in the event of bankruptcy, funds in an IRA are only protected up to one million dollars with the exception of rollovers from corporate retirement plans. The New York Times also refers to difference in state law exemption amounts for non-bankruptcy lawsuit protection. In other words, how much monetary protection provided by an IRA varies between states for creditor claims not associated with a bankruptcy filing. 

Pensions

Defined contribution plans such as 401(k)s and 403(b)s are protected by the Employee Retirement Income Security Act (ERISA). However, according to Executive Capital Resources, these types of accounts are not protected against Qualified Domestic Relations Orders (QDROs) which are judicial claims against retirement assets during events such as divorce proceedings. Moreover, according to the Wall Street Journal, a kind of 401(k) called the Solo 401(k) is not protected from creditors in every states.

What Collection Agencies Don't Want You To Know

Debt collection agencies aren't exactly thrilled to reveal what they're not allowed to do under The Fair Debt Collection Practices Act. Instead debt collection agencies may be more likely to avoid mentioning, explaining, or acknowledging the existence of such legislation in a possible attempt to place pressure on those persons who they are trying to collect money from. Consumer protection law is available to the public under Title 15, chapter 41, sub-chapter 5 of the U.S. Code.(1)

Being aware of what these rules disallow certain practices within debt collection, in regard to debt collection agencies can assist people in debt know their rights when their debt is passed to a debt collector. These rights help empower debtors in so far as the law allows, and does so for the purpose of protecting debtors from harassment, manipulation, threat and danger.

• Debt collection agencies can't violate your privacy

According to the privacy rights clearinghouse, debt collectors cannot leave pre-recorded voice mails on cellular phones if a cell phone was not given on a credit application.(4) Debt collectors are also not allowed to leave messages with third parties as per Title 15, chapter 14, subchapter V, section 1692c of the U.S. Code. the Privacy Rights Clearinghouse.

• Communication from debt collection agencies can be terminated

A debt collector can be asked to cease contact with the provision they are allowed one additional communication to notify a debtor of the collection effort thereafter. This does not mean one no longer owes debt, but it does mean that particular collection agency is obligated to cease communication following the defined contact prescribed by law.

• Misrepresentation of debt, business, legal and individual communication

Debt collection agencies must act honestly with their communications so as to avoid coercing, manipulating, harassing or lying to the debtor, all of which are illegal. The debt collector is required to disclose the purpose of their initial communication and may not mislead or contact the debtor before 8:00AM or after 9:00PM in that debtor's time zone.(1)

• Collection fees and assets are prohibited unless authorized

A debt collection agency may also neglect to mention the unfair practice provisions of the aforementioned statutory law. This includes unauthorized collection of debt owed and associated fees as well as personal property. By unauthorized one means as made through agreement with the collection agency or as allowed through other regulatory laws.

• Disclosure of identity

If a debt collection agency calls a debtor directly, they are required to provide "meaningful disclosure" of their identity.(1) This means a debt collector cannot telephone a debtor anonymously and provides the debtor an opportunity to communicate his or her wishes regarding the conduct of the debt collector.

Summary

Debt collection agencies are limited in their range of conduct by statutory law. Being aware of this law is something debt collectors may not want you to know because it empowers consumers and debtors, possibly to the disadvantage of the debt collector.

If debtors are unaware of these laws and how a debt collection agency must conduct itself, this can place clearer restraint on the actions, and communications of debt collectors so as not to seek out or utilize less than savory debt collection methods.

Sources:

1. http://bit.ly/czXTlG (Cornell University: Title 15, Chapter 41 U.S. Code)
2. http://bit.ly/alP2Y (Federal Trade Commission (FTC): Consumer guide)
3. http://bit.ly/VAUo9 (FTC: Consumer credit)
4. http://bit.ly/bBuOTw (Privacy Clearinghouse)