More on Debt Collection

My commenters offer wise advice.  One points out something I neglected to mention:  do not pay the debts of dead people.  Many collectors will attempt to collect from children.  That's a matter for the estate, not the kids, and if there is no meaningful estate, the debt dies with them.  Do not let an unscrupulous collector tell you otherwise.

Meanwhile, a consumer advocate writes the following:

I respect your passion, but you're inaccurate on some counts. I'm not a lawyer, but as a consumer rights advocate, I'm familiar with many of the laws you mention.

It's isn't against the law to sue after the Statue of Limitations has expired. The statute of limitations can be used as an affirmative defense. If you inform the debt company that you're aware of your rights, and that the debt is past the Statute of Limitations, then it can become interesting -- if you're still sued, does this count as an abusive debt collection practice. There has actually been small claims law suits based on this as a violation of FDCPA.

The FTC is more interested in larger issues.Do file a complaint, because they make take a larger action against the company. And always file a complaint with your state Attorney General. Most states have gone after illegal debt collection practices. You, as an individual, can sue and get a $1,000 if you show that the debt collector violated the FDCPA. If the debt collector has made an illegal entry in your credit report, you can sue for a FCRA violation, too.

You can tell the debt collector not to contact you again, by phone or letter. At that point, all they can do is send you one letter acknowledging your request. And they can sue you in court.

You DO SHOW UP IN COURT. There are consumer rights lawyers in most areas. Many times they'll help for free, or for a small fee. They are worth it. At a minimum, if you have to, show up by yourself and answer any court documents. Many times debt collectors do not have enough information to get a judgment if the people just show up, ready to challenge the collector. DON'T IGNORE THE SUMMONS.

(Sorry for caps, but I really wanted to make this point.)

Do not make a payment on the debt if you're planning on contesting the debt. If you do, you start the statute of limitations clock all over again. Yes, even a $5.00 payment restarts the clock.

Even if you do owe the debt, and want to pay it, make a deal and get it in writing. Most of the time, the debt will have illegally piled on interest and "fees". A $25.00 debt suddenly becomes a $1,800 debt. If you dispute the amount, show up in court and contest the amount. If you make a deal, get it in writing. If you make a payment, do it by check, keep all the receipts. Again, though, the way to protect yourself from illegal collection is to contest all debt collection activities -- get the company to prove both the amount, and their rightful claim to collect the debt.

Again, most places have consumer advocate lawyers. Do contact one of them, they'll help you. In addition, do read up on the online literature on the FDCPA and FCRA. Knowledge is power.

I am also beset by the usual number of debt collectors complaining that if people PAID THEIR DEBTS this wouldn't be a problem

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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