The New York Times has an article on a lawsuit in New York against debt collectors who engage in fraudulent practices. They were doing all sorts of nasty things, like not actually serving lawsuits but asking for default judgment, which is apparently called “sewer service”. What happens is that the first time the debtor learns about the lawsuit is when she is being garnished or finds out someone has a lien against her property.
Fact is, collectors can get in trouble for doing things they shouldn’t be doing, like harassing debtors. The federal and Colorado Fair Debt Collection Practices Act is very clear about even what kind of language collectors cannot use. However, the laws don’t consider simply calling someone at home harassment.
Unless the debtor gives the collector his consent or the collector has the express permission of a court of competent jurisdiction, a collector may not communicate with a consumer in connection with the collection of any debt:
(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o’clock a.m. and before 9 o’clock p.m., local time at the consumer’s location;
(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or
(3) at the consumer’s place of employment if the debt col- lector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.
If a debtor wants the collector to stop further communication, he must notify the collector in writing to stop such communication. It isn’t enough for the debtor to just tell the collector to stop calling. After the debtor tells the collector in writing to stop communicating with him, the only communication the collector can have with the debtor is a.) to tell him that collection efforts have been terminated, or b.) to notify the debtor that the creditor may take certain action which is normally taken by creditors, or c.) to notify the debtor that the creditor is taking certain specific action.
What’s most important to remember, though, is that even if some collector is harassing you or using language you wouldn’t use around your parents, the last thing you should do is simply ignore it. Find out what the debt is. Find out if it is a real debt. Find out if they’ll let you make payment arrangements.
Of course, keep in mind, that the second you file your bankruptcy petition, creditors must stop ALL debt collection procedures, including lawsuits and garnishments.