by Michael C. Cooley November, 2011
Many people at some point in time find that they are unable to pay a debt when it comes due. The inability to repay a debt may result from the loss of employment, or it may result from unexpected expenses (such as a medical bill for an emergency surgery or the furnace failing in the middle of winter). In the midst of a financial crisis, the last thing a person wants is to be dealing with overaggressive debt collectors attempting to extract payment. If you find yourself subject to aggressive debt collection tactics, the law may provide you some protection.
To the extent any debt is incurred primarily for personal, family, or household use, it falls within the definition of a "consumer debt". Examples of consumer debt includes money owed for the purchase of automobiles, money owed for medical costs, and some credit card debt (depending upon what goods or services were purchased with the credit cards). The practices used to collect "consumer debts" are governed by federal law, under the Fair Debt Collection Practices Act ("FDCPA"). The FDCPA imposes restrictions upon the debt collection practices of any third-party debt collector who is generally in the business of attempting to collect consumer debts. As such, the FDCPA even applies to the actions of attorneys who regularly collect debt on behalf of, or for, their clients.
The FDCPA generally does not apply to the debt collection practices of creditors who attempt to collect their own debts. For example, a hospital attempting to collect on the debt owed by a patient would not generally be subject to the provisions of the FDCPA. But if that hospital hired an attorney or collection company to collect the debt, then that attorney or company would be subject to the requirements of the FDCPA.
If a debt collector is subject to the provisions of the FDCPA, there are limits on the time, place, and means by which that debt collector may contact a debtor, and the means by which a debtor may limit or avoid further contact with a debt collector. Further, the FDCPA places limits on the extent to which a debt collector may contact a third party (such as a parent or neighbor) regarding a debt owed, and limits on the methods by which a debt collector may attempt to collect a debt. For instance, debt collectors subject to the FDCPA may not use threats to intimidate a debtor into paying money, or suggest that a debtor has committed a crime by failing to pay a consumer debt.
The FDCPA provides for a private right of action. That is, if a debt collector subject to the FDCPA violates its provisions, a debtor who is harmed by that violation may sue the debt collector to recover damages, including attorney fees. Any potential claims under the FDCPA must be brought within a relevant time period or statute of limitations, and it is therefore important that any person who believes he or she may be a victim of FDCPA violations and wishes to bring a claim under that statute consult with an attorney in a timely manner to evaluate any potential case.