What You Need to Know About Debt Collection

Debt Collection Methods You Need to Know

What happens if you don’t pay your debts? Falling behind on monthly payments can hurt your credit score. In addition, if you have an old debt with an outstanding balance, your debt is expected to go to a collection agency. Authorized debt collectors will contact you to recover unpaid debts on behalf of the original creditor. When a debt collector calls, it’s important to know your rights. Certain laws protect you from unlawful debt collection activities, illegal collection practices, and harassment for debt. A competent Washington debt defense lawyer can help you understand the process of debt collection and how to respond to them.

The article will give you an overview of debt collection by answering the following questions:

1. What is Debt Collection?
2. Who Qualifies as a Debt Collector Under Washington Law?
3. How Do Debt Collectors Work?
4. What is the Federal Fair Debt Collection Practices Act?
5. What are the Prohibited Collection Activities?
6. What is the Importance of Debt Validation and Verification?

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What is Debt Collection?

Debt collection is the process of recovering old debts that the borrower has failed to repay. Overdue debts such as medical bills, auto loan debts, personal loan debts, credit card balances, student loan debts, and unpaid utility bills are examples of delinquent bills that must be retrieved by a debt collector or collection agency. Debt collectors are third-party companies that work on behalf of another company to collect debts. If a company works for the original creditor, the creditor pays the debt collector a percentage of the debt collected.

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Who Qualifies as a Debt Collector Under Washington Law?

Debt collection is regulated by the Washington collection agency law to protect debtors from aggressive collectors. Debt collectors are required to obtain a yearly license from the Washington State Department of Licensing (DOL) and post a bond before collecting debts. The definition of a debt collector under this law is similar to the definition of the Federal Fair Debt Collection Practices Act (FDCPA). However, the FDCPA does not apply to lenders seeking to recover unpaid debts on their own. State laws regulate abusive collection practices by original creditors.

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How Do Debt Collectors Work?

An authorized debt collector must abide by the Washington collection agency laws while retrieving past-due debts. Debt collectors can contact you to retrieve unpaid debts through the following ways:

Send Letters

Licensed debt collection agencies will send letters to the address you gave your creditor. In case you’ve moved to another location, collection agencies can send letters or notices to your new address to collect a debt. When they send you letters, they’re required to give you the following details about your debt:

• business name and address of the debt collector
• name and account number of the original creditor
• date of your last payment to the original creditor
• a statement including the principal amount of the debt (including additional fees)

Phone Calls

Debt collectors will reach you through the contact number that you have provided to your creditor. A debt collector is only allowed to communicate with you (or your lawyer) or others liable for the debt. In case they can’t reach you by phone, they may call your employer or other people who may know how to contact you. Debt collectors can call you several times between 8:00 am until 9:00 pm (local time).  Any phone calls made outside this time frame are considered harassment.

Notify the Credit Bureaus of the Collection Account

A collection agency can immediately report your delinquent debt to credit bureaus upon receiving your account from the original creditor.

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What is the Federal Fair Debt Collection Practices Act?

The FDCPA was implemented to protect the rights of borrowers by prohibiting deceptive, abusive, and illegal debt collection methods by a collection agency. Under this act, a collector must follow standard procedures when contacting a debtor. Debt collectors are obligated to identify themselves, state their purpose for contacting the debtor, provide the name and address of the original lender, and notify the debtor of the right to dispute the debt.

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What are the Prohibited Collection Activities?

The FDCPA protects you from harassment and threats from debt collectors. A reliable Washington debt defense lawyer can help you understand your legal rights and protect you from abusive debt collectors. The following tactics are considered illegal:

• do any deceptive, abusive, and threatening practice
• pretend to be an attorney, police, law enforcement, or anyone other than a debt collector to force you to pay
• lie about the amount of money you owe or making false claims about where it came from
• contact you if you notified it to communicate only with your attorney
• require you to pay for your communication with them
• use any name other than the licensed name
• give you papers that look like they are court documents if they aren’t
• publish a bad debts list with your name on it
• pretend like it is trying to contact you because of an emergency

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What is the Importance of Debt Validation and Verification?

According to the Fair Debt Collection Practices Act, debt collectors are required to send you a written debt validation notice with information about the debt they’re trying to collect. This verification is important most especially if you don’t know who the original creditor is or if you want clarification on the amount you owed. It must be sent within five days of the first contact. The debt validation letter includes the following:

• the amount owed
• the name of the creditor seeking payment
• a statement that the debt is assumed valid by the collector unless you dispute it within 30 days of the first contact
• a statement that the debt collector will verify the debt by mail if you write to dispute the debt or request more information within 30 days
• a statement that the collector must provide information about the original creditor if you request within 30 days 

The Role of a Debt Defense Lawyer

If you’re unable to pay your debts, your lender will seek to recover the amount that you owed. Lenders may contact you directly, or they may negotiate with a debt collector or debt collection agency to recover the debt. Debt collection allows creditors and collection agencies to retrieve past-due debts from delinquent borrowers.

Debtors facing default have a right not to be harassed by debt collectors during the debt collection process. To know more about your rights, it is highly advisable to seek legal help from our experienced Washington debt defense lawyers at Northwest Debt Defense Law Firm. Contact our debt defense law firm to schedule a consultation. We will help you understand your rights as a debtor and negotiate a settlement or payment plan with your creditors.