Do You Know Your Rights in Regards to Bad Debt and Collections?

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We all borrow money from time to time; at least most people do. And, in most cases, we borrow with the right intentions.

Maybe the going got a little tough, and you needed a few hundred dollars to bridge some gaps. Or, perhaps it was an emergency that required urgent cash. The idea is usually to borrow now and repay the amount within a few weeks or months.

So, except for very few cases, every borrower foresees a situation where they repay the borrowed amount in accordance with the agreements of the loan. No one envisages a situation where they don’t repay the loan.

But, this rarely stops debt collectors from harassing borrowers, right? There have even been cases where collectors go to borrowers’ homes or threaten them with lawsuits. This is not only unacceptable but also illegal. Debt collectors aren’t allowed to harass you. They can’t call you throughout the day or threaten you as they wish.

The following are some of your rights as a consumer that you need to understand to help you protect yourself from these annoying debt collectors;

 

#1 A collector must be registered with the Council of Debt Collectors

Anyone coming to collect a debt from you should be registered with the Council of Debt Collectors. If the collector who is calling you isn’t registered with the council, don’t even listen to them. If they persist, report them.

 

#2 It has to be a debt listed in your name

Many times, collectors just come around, tell you that you owe a certain amount, and ask you to sign endless documents.

Don’t do this until they have proven to you that the debt in question is listed in your name and affects your credit score. If they can’t provide proof of this, ask them to leave and speak to a commercial litigation attorney.

 

#3 The debt collector cannot tell anyone else that you owe a debt

He or she should contact you directly for any information they need about the loan. They are not allowed to go around asking your neighbors about your name, family, lifestyle and so on. Simply put; they can’t tell anyone that you owe money.

 

#4 Lenders are not allowed to overcharge you even if you default

While they are allowed to charge penalties associated with defaulting, there are limits to what a lender can charge you no matter how long you’ve defaulted.

For instance, currently, a lender isn’t allowed to charge you more than twice the amount owed at the time of default in interest charges.

 

#5 They cannot and must never harass you

Harassment here covers a wide scope, from endless calls to abuses and threats. For instance, a debt collector cannot call you before 8.00 am or after 9.00pm. They also cannot call you more than three times a day.

You should also keep an eye out for collectors who try to use deceptive ways to collect money from you. If a debt collector threatens to sell your property, for instance, report them immediately.

Are you being harassed by debt collectors?

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