Harassment by Debt Collectors

As you suspected, the collection agent provided you inaccurate legal information. Collection agents are not your attorney. Do not believe legal advice from collection agents because the information they provide is usually incomplete or wrong, and is always self-serving.

A creditor or collection agent may pursue legal action against a debtor in civil, not criminal court. District attorneys decide whether to issue an arrest warrant and prosecute cases in criminal court. Creditors or collection agents may not have an individual arrested. As mentioned, defaulting on a debt is a civil matter, not a criminal matter.

In some states a sheriff may come to a debtor's home or place of business and serve them with a summons to appear in court, but a summons is not an arrest warrant. There are cases, however, where a person who ignores a summons has had a bench warrant issued that resulted in being held in jail.

Consult With an Attorney if Harassed

A collection agent may use aggressive tactics to when contacting the debtor, but not all aggressive tactics are legal. For instance, a collection agent may threaten to call the debtor's employer, file charges with the local sheriff, or say they will park a truck in front of the debtor's house with a sign that reads "Bad Debt" on it. All of these tactics and many others, are illegal under the Fair Debt Collection Practices Act (FDCPA).

To learn more about your rights under the FDCPA, visit the Federal Trade Commission's Fair Debt Collections Practices Act FAQ. Below I will provide you with information as to what you should understand about the collection process.

If you believe a collection agent violated your rights under the FDCPA, consult with a consumer rights attorney in your area to discuss possibly filing a lawsuit against the collection agency; not only could a lawsuit result in your debt being canceled, but you could be awarded damages. You can locate an experienced consumer rights attorney in your area by visiting NACA.net.

Receiving a summons

A debt collector that owns a debt account is a creditor. A creditor has several legal means of collecting a debt. But, before the creditor can force the debtor to pay the debt, the creditor must go to court to receive a judgment. A court (or in some states, a law firm for the plaintiff) is required to notify the debtor of the time and place of the hearing. This notice is called a "summons to appear" or a "summons and complaint." In some jurisdictions, a process server will present the summons personally. In others the sheriff's deputy will pay a visit with the summons, and in others the notice will appear in the mail. Each jurisdiction has different civil procedure rules regarding proper service of notice. (See Served Summons and Complaint to learn more about this process.)

If you ever receive a summons you should do as it instructs! This is not just a social invitation that you can ignore. In the hearing, the judge will decide if the creditor should be allowed to collect the debt. If the debtor fails to appear, the judge has no choice but to decide on behalf of the creditor.

Therefore, if you receive a summons, the first thing you should do is contact the law firm representing the creditor. Open a negotiation to see if they are willing to settle the debt. If not, it would be wise to respond as indicated in the summons. If there is a hearing, attend it and present your side of the story to the judge. Use facts, tell the truth, dress appropriately, and show the court respect. The court may or may not decide in your favor, but at least you exercised your right to be heard.

Judgment

The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor's bank accounts, and a lien on the debtor's property. Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.

Wage Garnishment

The most common method used by judgment creditors to enforce judgments is wage garnishment, in which a judgment creditor would contact the debtor's employer and require the employer to deduct a certain portion of the debtor's wages each pay period and send the money to the creditor. However, several states, including Texas, Pennsylvania, North Carolina, and South Carolina, do not allow wage garnishment for the enforcement of most judgments. In several other states, such as New Hampshire, wage garnishment is not the "preferred" method of judgment enforcement because, while possible, it is a tedious and time consuming process for creditors. In most states, creditors are allowed to garnish between 10% and 25% of your wages, with the percentage allowed being determined by each state. See Advice on Judgment Garnishment to learn more about wage garnishment.

Levy bank accounts

A levy means that the creditor has the right to take whatever money in a debtor's account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state's laws to find if a bank account can be levied. See the Bills.com resource State Consumer Protection Laws and Exemptions for an overview of each state's rules.

Lien

A lien is an encumbrance -- a claim -- on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinance the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment. Again, every state has its own rules about property liens, so debtors with a judgment against them who own property should review their state's laws to learn creditor can and cannot do to enforce its judgment. See the Bills.com resource State Consumer Protection Laws and Exemptions for an overview of each state's rules.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com