Last updated Sept. 26, 2017.
First, let’s make a distinction between creditors and debt collectors, because they have to follow different rules under different laws. Your creditor is the person or party to whom you owe the debt. It’s most often a bank, a credit card company, or a medical service provider. When creditors can’t collect on the debt, they’ll sometimes hand it over to a debt collection agency.
A debt collector is a person or party whose main business is the collection of debts. That includes collection agencies and law firms that specialize in debt collection.
This post will review how debt collectors work, when they can and can’t contact you, and how to stop debt collectors from calling.
When can a debt collector contact me?
As a debtor, you receive certain protections from debt collectors under the Fair Debt Collection Practices Act (FDCPA). The FDCPA was enacted in response to reports of threatening and abusive debt collection practices — collectors threatening bodily harm, calling dozens of times every day, contacting the families and employers of debtors, and more. One of the most important functions of the FDCPA is regulation of how and when debt collectors can contact you.
A debt collector can’t call you before 9 a.m. or after 8 p.m. They can’t call you multiple times a day. If you’re receiving calls from a debt collector, you can request that they stop contacting you and they’re required by law to honor that request. 15 U.S.C. § 1692(c). They can still call you if the status of your account changes. That means they can call to let you know that they’re giving up on collection or that they’re going to sue. Id.
When you hire an attorney, the attorney will generally send out notices to your creditors. If a debt collector has notice that an attorney represents you, they can only contact the attorney. If your attorney doesn’t send out that type of notice, you can inform the debt collectors yourself. Any debt collector that contacts you after receiving notice that you’ve hired an attorney is breaking the law and you’ll be able to sue for damages. Id.
You should always communicate with debt collectors in writing by certified mail and you should always keep the receipt and a copy of the letter. You should also keep records of the time and content of phone calls. If you feel a debtor has been harassing you, an experienced attorney can help you with your case.
When can a creditor contact me?
Creditors have somewhat greater rights to contact you than debt collectors. The only federal law that affects whether creditors can contact you is the Federal Trade Commission Act (FTCA). It prevents creditors from using unfair or deceptive practices. 15 U.S.C. § 45(a).
However, the FTCA doesn’t give you a private cause of action. You have to report the allegedly unfair or deceptive practice to the FTC and they’ll review it. If they find that whatever your creditor is doing is illegal, they’ll order the creditor to stop. 15 U.S.C. § 45(b). At the end of the day, it’s a slow and difficult way to get things done. You’ll have better luck under state law.
Ohio state law requires mortgage lenders and short-term lenders to follow the FDCPA, even if they’re original creditors. R.C. § 1321.591, 1321.45. For those debts, creditors can only contact your attorney. For other types of debt, however, your creditor can contact you whenever they want.
How can I stop creditors from contacting me?
If you’re dealing with debt collectors, you only need to request that they stop. If you’re dealing with creditors, you can ask them to stop but they don’t have to. In any case, they can continue to try to collect without contacting you. If the debt is secured by property, they can repossess the property. They can also foreclose on your home.
If you’re delinquent on a debt, debt collectors and creditors have the right to sue you for collection. They may contact you to let you know they’re taking you to court, but you’ll receive notice from the court shortly after they sue, anyway.
In Ohio, you have 28 days to answer the complaint. If you don’t answer, the court will enter judgment against you and you’ll be liable for the full amount of your debt. If you do answer, you can argue that you don’t owe the debt or that you owe less than your creditor is claiming. The judge will decide what, if anything, you owe and enter a judgment for that amount. If you don’t pay the judgment, your creditors may get a court order to garnish your wages, levy your bank accounts, or place liens on your property.
Are there any other options?
You can stop creditors from calling or suing by filing for bankruptcy. When you file for bankruptcy, you invoke the protection of the automatic stay.
The automatic stay prevents creditors from attempting to collect in any way — they can’t foreclose, repossess, garnish, levy, or sue. They also can’t contact you. They can only address your debts through the bankruptcy court. You’ll deal with your debts through the bankruptcy process; most debtors keep their property and pay pennies on the dollar for their debts.
Think carefully before alerting your creditors that you intend to file for bankruptcy. They may act to repossess your property or sue you for collection before you file. It might be worth putting up with a few weeks of calls before you file.
In any case, filing for bankruptcy is a serious decision and may not be right for you. If you’re struggling with debts, reach out to an experienced bankruptcy attorney to discuss your circumstances and your options. Cope Law Offices, LLC handles bankruptcy cases in Dayton, Ohio, and beyond, and is standing by to help with a free bankruptcy evaluation.