Legal Credit Repair - Knowing the Law

Featured Resource - 16 Illegal Credit Actions - Learn what creditors are prohibited by law from doing to you.

Congress has passed legislation protecting people who have bad credit, including the Fair Credit Reporting Act (FCRA) which protects debtors from collection agencies and creditors. If you have bad credit, you might want to read this article, particularly if you are being harassed or threatened by creditors.  Before reading, however, please understand that you should always consult with a lawyer if you are facing legal problems.  Neither this article nor this web site constitutes legal advice.  Information is provided for reference only.  You can anonymously submit a free question to a lawyer referral service and pre screened lawyers will respond to you.

You Have the Right To Not Be Harassed or Threatened

Debtors have the right to ask collection agencies or any other company or service to stop hassling them.  To do so, you should contact the collection agency or other company that is harassing you immediately and in writing, requesting that they stop communication with you completely. It is important to word your letter wisely  so that you do not given them 'ammunition' to use against you.  

You can do this if your collection agency has claimed a lawsuit against you or if the time frame wherein creditors may contact you has expired.

If the collection agency has written several letters or made several phone calls threatening you with a lawsuit, you can write an informal letter asking the agencies to stop nagging you. If you have a current debt, it is wise to negotiate with the creditors, since some creditors may reduce your balance or even drop the debt completely.

If the debt is older than seven years, it is important that you DO NOT communicate with a collection agency regarding the bill. At the seven-year period, the account should have been removed from your credit report. If it has not, the creditor is in violation.  Nowadays, there are companies that buy old debts for pennies on the dollar,  and then send threatening letters to the debtors.  If the debt is older than seven years, do not communicate with them.

There are several reasons why creditors do not file lawsuits. Most of this is driven by the bottom line.  Attorney fees are expensive, and if the debt is old or it seems likely that you have no assets, it will cost more to try to collect the balance than to charge it off.

If you owe a debt, you have the legal right to protect yourself against creditors. However, the wisest solution is to not ignore the problem and find a legal credit repair solution. Problems do not go away; instead, they add up into problems.

Things that Collection Agencies Should Not Be Doing

It is important to document all contact from collection agencies. This can protect you when the moment arises. 

Under the law, collection agencies cannot call your mom and dad, or any other family member, regarding your debt. The collection agencies are obligated by law to cease communication if you have been subpoenaed to court. Furthermore, collection agencies are to avoid calling debtors after 9pm or before 8am. (Some laws state that the collection agencies cannot call after 10pm and before 5am.)

If you have an attorney and the collection agency knows this and calls you personally anyway, immediately file a complaint to the proper agencies regarding the action.  If you have a job and a collection agency calls your work environment he or she is in violation of the law. (Note: If your employer allows calls, the law may not be effective)

Collection agencies are prohibited from impersonating law enforcement or government officials in an effort to collect a debt. At no time is a collection agency allowed to make available to the public information regarding your debts, nor are they permitted to list debtors in 'deadbeat lists.'  Collection agencies are prohibited from sending letters, making phones calls, or communicating in any way that implies false impersonation. It is also against the law for collection agencies to repeatedly call your home requesting you or threatening you to pay the debt. If a collection agency phones your home, they must comply with the law and identify themselves within one minute of the phone conversation.

Please read 16 Illegal Creditor Actions for more information.