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By Laura Royer, [email protected]

If a military family is receiving calls or notifications from debt collectors, it’s important for Personal Finance Managers (PFMs) to help them understand their rights, which are covered under the Fair Debt Collection Practices Act (FDCPA). PFMs can tell clients that this act specifically prohibits debt collectors from using abusive, unfair, or deceptive actions to collect a debt. Here is a breakdown of what a debt collector can and cannot do when trying to collect a debt.

First, debts that are protected under FDCPA include medical bills, credit cards, auto loans, student loans, mortgages, or other household debt. What is not included in business loans or business debts.

The Legal Parameters of Communication

Debt collectors can call borrowers at home, text, email, or send letters in the mail. They cannot call before 8:00 am or after 9:00 pm or at work unless the borrower agrees to it, or if the borrower’s employer prohibits it.

If a borrower requests that the debt collector stop calling, they must stop. However, in order for the borrower to make that request, borrowers must write a letter to the debt collector for contact to stop. It is best for the borrower to send their letter by certified mail and pay for a return receipt so that the borrower has proof of receipt.

Once the debt collector has received their letter, they can contact the borrower to confirm receipt of the letter or to communicate any action they will be taken against the borrower for nonpayment of the debt. If the borrower has retained an attorney, the collector must directly communicate only with the borrower’s attorney. The only exception to this rule is if the borrower’s attorney is unresponsive, and in this case, the creditor may communicate directly with the borrower.

Other Ways a Creditor Can Find the Borrower

To find the borrower, a collector can contact family, friends, or people who know the borrower to find out their address, phone number, or place of employment. A creditor cannot share information about the debt with anyone other than the borrower or spouse and may not contact the same person more than once when looking for the borrower.

A Creditor Must Validate the Debt

To collect the debt, the collector must send a written “debt validation notice” of the debt to the borrower which should include:

  • how much money the borrower owes;
  • the name of the creditor the borrower owes it to; and
  • what to do if the borrower does not think it’s his or her debt.

How to Dispute the Debt

If the borrower does not believe they owe the debt, they can send the collector a letter disputing any or all of the total debt. The borrower may also ask the collector to verify the debt, and, if he or she sends the letter within 30 days of receiving the validation notice, the collector must send written verification of the debt. The verification can be a copy of a bill for the amount owed before the collector attempts to collect the debt again.

Statute of Limitations for Debt Collection

The military family should know the creditor can sue the borrower for the debt. However, there are statutes of limitations for how long a debt may be collected in each state, based on what type of debt it is. The statute of limitations usually begins when a borrower fails to make a payment and once reached, the collector is “time-barred” from suing the borrower.

It’s important to note that under some state laws, a payment or written acknowledgment of the debt could start the collection clock all over again for a time-barred debt. Unless the borrower sends a letter by mail asking for contact to stop, the creditor may continue to try and collect the debt once the debt is time-barred. For more information on time-barred debts go to

Garnishment of Income or Money

If the creditor successfully sues the borrower for the debt, they may garnish the borrower’s wages or bank account for the payment. In addition, some federal benefits such as tax return money may be garnished to pay debts such as delinquent taxes, child support, alimony, or student loans.

Illegal Debt Collection Methods

To collect a debt, the collector cannot lie, use foul or inappropriate language, threaten or use unfair practices to get the borrower to pay the debt. If a borrower believes a collector has violated the FDCPA, they should report the creditor to the states attorney’s office, the Federal Trade Commission and the Consumer Financial Protection Bureau.

For more information on fair debt collection practices or sample letters that can be used to communicate with debt collectors, see the following resources:

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