What not to tell a debt collector?
Last reviewed: AUG 02, 2023
Debt collectors may ask questions to verify your identity, but you should never provide sensitive or financial information, at least not until you’ve verified the debt and that it’s not a scam.
If you’re contacted by a debt collector, they may usually ask you for certain information to ensure they’re talking with the right person before they can start asking about the debt. The Fair Debt Collection Practices Act (FDCPA) generally limits who debt collectors can speak to about your debt, so they may ask questions to ensure they’re talking to the right person.
Debt collectors are required to provide you with certain information when or soon after they first communicate with you, in a format usually called a debt collection validation notice. Usually provided electronically or in writing, the notice is meant to help you understand whether the debt is yours, and if not, how you can dispute it.
In addition, if you are speaking to the debt collector on the phone, you can also ask them to provide:
- Learn more about the information debt collectors are required to provide
The debt collector may ask you for personal information to verify your identity. This may include:
- If you choose not to verify your identity by providing information, like your Social Security number, the debt collector will generally ask you for another form of identification, including:
Again, it is your choice whether or not to provide the information requested.
Never give out or confirm personal or sensitive financial information – such as your bank account, credit card, or full Social Security number – unless you know the company or person you are talking with is a real debt collector.
If the debt collector is a scam, they could use this information to:
- If the debt is legitimate – but you think the collector may not be – contact your creditor about the calls. Share the information you have about the suspicious calls and find out who, if anyone, the creditor has authorized to collect the debt.
Learn the warning signs of a debt collection scam
If you’re having trouble with a debt collector, you can submit a complaint with the CFPB.
How do I dispute a debt from a collector?
If you don’t believe you owe the debt, you can dispute it with the debt collector and the credit reporting company. If you dispute the debt in writing within 30 days of receiving information about the debt from the collector, then the debt collector must send you verification of the debt.
Do debt collectors ever sue?
If you receive a notice from a debt collector, it’s important to respond as soon as possible—even if you do not owe the debt—because otherwise the collector may continue trying to collect the debt, report negative information to credit reporting companies, and even sue you. If you get a summons notifying you that a debt collector is suing you, do not ignore it—if you do, the collector may be able to get a default judgment against you (that is, the court enters judgment in the collector’s favor because you didn’t respond to defend yourself). The debt collector could then garnish your wages and bank accounts, meaning it could take money from your paycheck or accounts. Make sure you respond by the date stated in the court papers so you can defend yourself in court. If you are sued, you may want to consult an attorney.
The law protects you from abusive, unfair, or deceptive debt collection practices. Here is information about some common debt collection issues:
- It is important that you respond as soon as possible if a debt collector contacts you about a debt that you do not owe, that is for the wrong amount, that is for a debt you already paid, or that you want more information about. Make sure you respond in writing to dispute the debt. If you don’t, the debt collector may keep trying to collect the debt from you and may even end up suing you for payment.
- Within five days after a debt collector first contacts you, it must send you a written notice, called a “validation notice,” that tells you (1) the amount it thinks you owe, (2) the name of the creditor, and (3) how to dispute the debt in writing. Don’t give a debt collector any personal or financial information until it sends you this validation notice—it may be a scam.
- Make sure you dispute the debt in writing within 30 days of when the debt collector first contacted you. If you do so, the debt collector must stop trying to collect the debt until it can show you verification of the debt. You should dispute a debt in writing if:
For sample dispute letters, see the CFPB’s “What should I do when a debt collector contacts me?” If you have already paid the bill that the debt collector is trying to collect, include that explanation in your letter and send copies (but not originals) of any receipts, canceled checks, or other information you have to show that you already paid the bill. Send the dispute letter by certified mail with a return receipt, and keep a copy of the letter and receipt.
For more information, see the FTC’s “Don’t recognize that debt? Here’s what to do”.
Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take. They also cannot make repeated calls over a short period to annoy or harass you.
Debt collectors cannot make false or misleading statements. For example, they cannot lie about the debt they are collecting or the fact that t
How much do debt collectors charge?
People can get into debt for a variety of reasons. This includes missed mortgage payments, student loans, credit cards, and much more. If the debt is not paid, then the company that sold the goods will financially suffer. Therefore, the money needs to be recovered, which is where debt recovery comes in. Debt recovery specialists help businesses and individuals reclaim millions of dollars across Australia every year.
The service involves contacting the debtor through phone and letters and may progress to in-person visits or court action if the communication is ignored. The aim is to recover the debt either through cash payment or by selling goods that the debtor owns to cover the costs.
Debt recovery can either be performed by a debt recovery agency or a debt recovery lawyer. The average Australian has $60,000 worth of debt. This would usually be from several sources i.e student loans, credit cards, missed rent payments, etc.
Debt recovery is usually charged on a no collection no fee basis. This means that the company will only charge you if successful. If the debt can be recovered, then the cost is often priced as a percentage of the total debt, especially when using a debt collection agency over a debt collection lawyer.
However, a debt recovery lawyer will charge per hour, with an average cost of between $160 and $450 per hour. So, the method of debt recovery you choose (debt collection agency vs debt collection lawyer) will have the biggest impact on costs.
The cost of debt recovery varies depending on several factors, including:
- Type of action
- Value of debt
- Complexity of case
- Recovery rate
- Time
- Experience – Debt Collection agency vs Debt Collection lawyer
- Location
The type of action your debt recovery agency or lawyer initiates will affect the cost. Keep in mind that only legal professionals can initiate steps that involve the courts, as debt collection agencies work on a no recovery no fee basis, with fewer steps involved.
Sending out letters of demand is the cheapest part of the process, averaging between $70 and $120. Often this is enough to prompt action from the debtor, especially as it comes from a debt collection specialist rather than yourself.
On the other end of the scale, winding up proceedings can cost between $440 and $3,700. Though at this point, the debt should have already been recovered. Plus, any fees should be recoverable from the debtor, depending on your state and what your lawyer has advised you.
The true cost will vary between each legal practice and debt recovery agent you compare. This is because each company is free to set its rates, plus each will have different levels of experience. For example, a legal partner could charge hundreds of dollars more per hour, versus what a newly graduated lawyer would.
Most debt recovery agencies work on a contingency pricing structure that will take a percentage of the debt owed to you, rather than giving you a fixed fee for their service. This is different from a debt recovery lawyer who.
How long can a debt collector try to collect in Maryland?
Are you tired of debt collectors harassing you and your family? Even if you owe debts you cannot pay, it is important to remember that you have rights. The Fair Debt Collection Practices Act provides protection for individuals who owe money by regulating what debt collectors are and are not allowed to do.
The act regulates the hours they are allowed to call your home and the people they can contact. You are also protected from embarrassing media, including postcards, which would give away your financial information. Even if they are not calling repeatedly or outside of the scheduled hours, it is still possible to stop creditors from contacting you. If you send them notice that you no longer want to communicate with them or that you refuse to pay the debt, they are legally not allowed to contact you to continue asking about the money.
There are certain exceptions to this rule, including informing you that collection efforts are being terminated or that the collector intends to sue you or take other legal action.
The state of Maryland also provides limits on the length of time a creditor has to collect debts. The statute of limitations gives creditors 3 years to file a lawsuit against you for the debt you owe. If the case is brought to court and the judge rules in favor of the creditor, they then have only 12 years to collect the settlement. If the statute of limitations has expired, it is important to alert the courts of this issue by showing them a copy of your credit report.
It is important to know that creditors are legally barred from taking all of your property or garnishing all of your wages, even after a judgment has ruled in their favor in bankruptcy court. A creditor can only garnish up to one-quarter of your wages per pay period and cannot take exempt property.
In the state of Maryland, you are entitled to keep $6,000 worth of cash or selected property, $5,000 worth of clothing, books and tools in order to practice a profession and certain personal injury settlements and medication. In order to protect your exempt property, you are required to declare the property as such within 30 days.
I have been assisting clients dealing with debt at my firm since 2008, and I can inform you of your rights. While debt collectors may try to harass you and make you feel guilty, I can explain how you are protected under federal and state law. To learn more about your legal rights, take advantage of my free case evaluation.
For more information about filing for bankruptcy and your other legal options, contact a Silver Spring bankruptcy attorney at The Law Office of David Cahn today!
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What is the Maryland debt Protection Act?
In Maryland, the federal Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. §§ 1692 and following) and state law regulate debt collectors. The federal FDCPA applies to every state and protects consumers from unfair and deceptive debt collection practices. The FDCPA also prohibits debt collectors from contacting you at certain times and places. Likewise, Maryland has a law protecting consumers from deceptive and abusive behavior by people and businesses collecting debts. The Maryland Consumer Debt Collection Act adds protections for consumers by covering activity by both debt collectors and creditors. In most situations, the federal FDCPA only applies to debt collectors.
You can find the full text of the Maryland Consumer Debt Collection Act in the Maryland Code at Md. Code [Com.], §§ 14-201 through 14-204. These laws prohibit debt collectors and creditors from engaging in deceptive, threatening, or other abusive collection behavior.
The federal FDCPA limits what debt collectors can and can’t do when attempting to get you to pay a debt. For example, the FDCPA:
- Prohibits debt collectors from using abusive or harassing language or tactics
- Requires debt collectors to provide certain information about the debt they are attempting to collect
- Prevents debt collectors from calling you at inconvenient times or places
- Prohibits debt collectors from discussing your debt with third parties, except in limited circumstances
The FDCPA applies to debt collectors and some third-party debt buyers, but it usually doesn’t cover collection activities that an original creditor performs. (When collecting its own debts, a creditor must comply with the FDCPA if it uses a different name that implies a third party is attempting to collect the debt.)
Maryland law also protects consumers from abusive and deceptive debt collection tactics. While the Maryland law is similar to the FDCPA, it also offers additional protection to consumers. For example, it covers creditors as well as debt collectors. (Md. Code [Com.], § 14-201).
The Maryland Consumer Debt Collection Act applies broadly to any collector. A collector is “a person collecting or attempting to collect an alleged debt arising out of a consumer transaction.” (Md. Code [Com.], § 14-201).
So, unlike the FDCPA, which only applies to people in the business of debt collection (with a few exceptions), the Maryland Consumer Debt Collection Act covers individuals, estates, or any kind of business or legal entity. Any person or business seeking payment in Maryland, such as a creditor, as well as any collection agency or lawyer hired to collect a debt, must comply with the Maryland Consumer Debt Collection Act.
The Maryland Act covers activity related to the collection of a debt resulting from any transaction involving a person seeking or acquiring “real or personal property, services, money, or credit for personal, family, or household purposes.” (Md. Code [Com.], § 14-201). This means the law covers most consumer debts, like credit card bills, charge card accounts, car payments, consumer leases, and mortgages.
The Maryland Consumer Debt Collection Act prohibits th
How do you fight debt collection?
When you’re facing off against a debt collector, it’s important to know the rules the collector must follow. However, just understanding your rights isn’t enough. Debt problems need a game plan, and yours will likely depend on whether you’re dealing with a case of misidentification or if you just can’t pay the bill.
When you first fall behind on a bill, your creditor will likely contact you and ask you to bring your account current. After some time, the account will get transferred to a debt collector. That’s when the federal Fair Debt Collections Practices Act (FDCPA) will apply.
Under the FDCPA, a collector can’t:
- Harass you
- Threaten you
- Lie to you
- Use unfair practices
A creditor that violates the FDCPA and causes you harm might have to pay you monetary compensation and fines if you sue civilly and win.
When you fall behind on a debt secured by collateral (property, such as your house or car, that you pledge against the debt), your creditor can use foreclosure or repossession tactics to recover the property, sell it, and apply the funds to your balance. In such a case, the caller will likely be the original creditor, not a bill collector, and you’ll need to look into options other than those offered in this article.
If you didn’t put up collateral (for instance, if the debt in question is a credit card payment or a cell phone bill) the collector can call or write to you, but that’s about it. A creditor can’t take the following actions until it files a lawsuit and gets a money judgment against you:
Seize your property
Garnish your wages
Freeze your bank account
There are exceptions, however. For instance, the government has the right to take these types of steps if you owe taxes or student loan debt.
Your options will depend on whether you owe the debt. For instance, it might (or might not) be worth fighting a legitimate debt in court. When making the decision, consider the amount of money and time you have to spend on the case, as well as whether you have a defense. However, if you don’t owe the debt, you’ll likely want to take action.
If you owe a debt, paying it in full or negotiating it down to a lower amount might be your best bet. If you don’t have the funds, you have other options:
- Ask for a payment plan
- Settle the debt for less than you owe
- Consider bankruptcy
If it isn’t your debt, you’ll likely want to dispute it. Here are a few suggestions that might work in your favor:
- Request validation of the debt
- Dispute the debt in writing
- Keep records of all communication
You can file a complaint with the federal Consumer Financial Protection Bureau or through a consumer protection office in your state. Many states have more stringent laws governing debt collectors. For help finding federal or state agencies, go to USA.gov.
This general information doesn’t address all aspects of the collection process and isn’t legal advice. You should meet with a lawyer for an evaluation of your particular case.
If a debt collector sues you, you could have a defense. A lawyer can explain what defenses might apply in your situation.
Do debt collectors ever sue?
If you receive a notice from a debt collector, it’s important to respond as soon as possible—even if you do not owe the debt—because otherwise the collector may continue trying to collect the debt, report negative information to credit reporting companies, and even sue you. If you get a summons notifying you that a debt collector is suing you, do not ignore it—if you do, the collector may be able to get a default judgment against you (that is, the court enters judgment in the collector’s favor because you didn’t respond to defend yourself). The debt collector could then garnish your wages and bank accounts, meaning it could take money from your paycheck or accounts. Make sure you respond by the date stated in the court papers so you can defend yourself in court. If you are sued, you may want to consult an attorney.
The law protects you from abusive, unfair, or deceptive debt collection practices. Here is information about some common debt collection issues:
- It is important that you respond as soon as possible if a debt collector contacts you about a debt that you do not owe, that is for the wrong amount, that is for a debt you already paid, or that you want more information about. Make sure you respond in writing to dispute the debt. If you don’t, the debt collector may keep trying to collect the debt from you and may even end up suing you for payment.
- Within five days after a debt collector first contacts you, it must send you a written notice, called a “validation notice,” that tells you (1) the amount it thinks you owe, (2) the name of the creditor, and (3) how to dispute the debt in writing. Don’t give a debt collector any personal or financial information until it sends you this validation notice—it may be a scam.
- Make sure you dispute the debt in writing within 30 days of when the debt collector first contacted you. If you do so, the debt collector must stop trying to collect the debt until it can show you verification of the debt. You should dispute a debt in writing if:
For sample dispute letters, see the CFPB’s “What should I do when a debt collector contacts me?” If you have already paid the bill that the debt collector is trying to collect, include that explanation in your letter and send copies (but not originals) of any receipts, canceled checks, or other information you have to show that you already paid the bill. Send the dispute letter by certified mail with a return receipt, and keep a copy of the letter and receipt.
For more information, see the FTC’s “Don’t recognize that debt? Here’s what to do”.
Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take. They also cannot make repeated calls over a short period to annoy or harass you.
Debt collectors cannot make false or misleading statements. For example, they cannot lie about the debt they are collecting or the fact that they are going to take legal action against you if they do not intend to do so.