Debt Recovery Law And What It Means To You

The debt recovery law is a set of consumer protection laws, rules and acts that dictate practices of debt collection agencies, banks, loan companies or credit card issuers and what steps they can take to collect debts. What this means is their types of contact are governed with restrictions and harassment cannot be employed, to collect a debt.

In the US, the debt recovery law includes a number of different acts, including the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Consumer Credit Protection Act and the ABA-Consumer Credit Law, just to name a few. Regardless of which law or act you research, the consumer is protected under certain regulations or rules. Communication in connection with debt collection is governed by certain restrictions in the hours and number of times they may contact you, within these time frames.

It's important to realize that just because consumers have rights under the debt recovery law, lenders that offer credit also have particular rights, when it comes to recovering the money that is owed to them. In other words, you shouldn't think you are immune from debt collection efforts, just because there is consumer protection laws in place, which govern the methods used for debt collection.

Under the Fair Debt Collection Practices Act, consumers are protected from abusive and unfair or deceptive debt collection practices on personal debts like their credit card accounts, mortgage, auto loan or medical bills, but not on debts that are incurred for their business. While a debt collector is not supposed to contact you at inconvenient times or places, they can call you at work until you tell them not to and they can call between the hours of 8am to 9pm and still be within legal bounds. There is a whole list of things that collection agencies or lawyers may not do under the Fair Debt Collection Practices Act.

Debt collectors are prohibited from harassing or abusing you with repeated use of the phone for annoyance, using obscene language or using threats of violence. They can't lie or make false statements while they are trying to collect a debt. This means they can't say things, like you committed a crime or that they are government representatives. They can't claim you will be arrested, if you don't pay the bill or that they will garnish wages, sell your property or take legal action, unless they have the right to do so and they intend to do it.

Understanding your rights under debt recovery law can be easy enough, if you do a little research, but you may need legal advice or a credit counselor. While the debt recovery law can protect you from unfair practices of debt collectors, it might not protect you from debts that are legitimately owed. If you don't pay a debt, it is possible you will be sued and if a judgment is entered against you, your paycheck can be garnished or collateral can be repossessed or foreclosed on. In cases like this, you should hire a lawyer, once you have received a lawsuit summons. Just because you might be protected under a debt recovery law doesn't mean you aren't subject to legal action, as long as it is within legal guidelines.