After a busy holiday season, we often see growth in debt collection cases. Many people spend a lot of money on holidays. From buying presents and expensive airline tickets to purchasing a nice item that has had your eye for some time. This can lead to a tricky situation when bills are due after the holiday season, and the consumer uses all their income up until the next payday.

You might have spent your entire last paycheck on a plane ticket home for the holidays, and you have nothing left to pay your car note. Maybe you spent your last $50 on a present for a family member or friend, and you can't afford to make your minimum credit card bill. Planning your holiday season is important. But it is even more important to plan your holidays with a budget in mind. Holidays are important, but you don't want to not pay on your already existing debt.

Whenever a person does not pay on their debt, the creditor has different options. Whatever options the creditor (the one who the debt is owed to) has will always be listed in your contract, terms and conditions. The contract normally states that the creditor has the option to consider you in default. They will then send you to collections to try to collect on the unpaid debt. The creditor has the option to demand you pay the entire balance of the debt in full. If you are paying off a vehicle and default on your loan, your vehicle can be repossessed and sold off at an auction to pay off the debt.

Whether the debt is from a credit card, a car loan, or a personal loan, the last step a debt collector will take is to file a lawsuit to attempt to recover the debt. Before any lawsuit is filed, the debt collector or creditor, will attempt to settle the debt outside of court. The creditor will call you to discuss the debt and will send you letters, emails, and maybe even text messages. All debt collectors must follow the Fair Debt Collection Practices Act (FDCPA). The FDCPA is a federal law that provides debt collectors/creditors with strict guidelines on how to collect a debt from a consumer. The FDCPA tells the credit what is allowed and not allowed under the law.

Under the FDCPA, a debt collector or creditor cannot:

1.           Call before 8AM or after 9PM, unless you agree to this;

2.           Call you at work if you tell the creditor not to;

3.           Contact you after you inform them in writing to stop contacting you;

4.           Tell you they will take legal action against you if they do not actually intend on taking any legal action;

5.           Harass you or any third party;

6.           Contact you if you send a letter disputing the debt;

7.           Contact you if you send a letter asking for proof of the debt;

8.           Use obscene or profane language;

9.           Repeatedly call you to annoy you;

10.         Take your property or threaten to take your property unless this can be done legally;

11.         Try to collect any other fees, interests, or charges in addition to the amount already owed;

12.         Falsely claim you committed a crime;

13.         Falsely claim they are attorneys or government representatives;

14.         Misrepresent the debt you owe;

15.         Give false information about you to any person;

16.         Give false information about you to any credit reporting company;

When debt collectors/creditors contact you to repay a debt, you must be careful with what you say and be mindful that any phone call with a debt collector is recorded. The debt collectors/creditors will inform you that these calls are recorded. Many times, you can settle the debt by speaking with the debt collectors but you should not agree to anything over the phone and should always ask that you be sent the settlement agreement in writing. If you decide to settle a debt with a debt collector, you should always discuss the settlement with a licensed attorney prior to signing any agreement.

If any debt collectors are harassing you or violating the FDCPA, you should contact an attorney instantly. Violations of the FDCPA can get you damages up to $1,000. If you live in Arkansas, the Center for Arkansas Legal Services may be able to assist you with any debt collection action. To see if you qualify for free services, please contact the Helpline at 501-376-3423 to apply or apply online at https://www.arkansaslegal.org/.      

AUTHOR: DREW RODGERS, STAFF ATTORNEY FOR CENTER FOR ARKANSAS LEGAL SERVICES