Debt collection is the process of pursuing payments of debts owed by individuals or businesses. A debt collector is a person or a company that regularly collects arrears owed to others most especially those that are past due. They are involved in the business of recovering the money owed on delinquent accounts.
Companies choose to hire debt collectors for a certain fee or percentage of the total amount to be collected. They handle all types of debt including credit card debts, medical bills, automobile loans, personal loans, student loans, and even unpaid utility and cell phone bills. They usually contact delinquent borrowers through certified mail, letters, and phone calls to convince them to repay what they owe. It is important to know the boundaries on when and where the debt collector can call you and communicate with you.
Some debt collectors may abuse their power and may tend to violate state laws just to get money from debtors. It is important to know the debt collection laws to protect your rights from abusive debt collectors who are crossing the line into the unlawful territory. You should not be intimidated by their illegal practices and strategies. You must know what to do and say when a debt collector calls you to avoid mistakes that could put you at legal or financial risk. You need to be careful about the information that you will disclose with a debt collection caller such as your name and address, bank account details, and other personal details. If the law was violated by the collector, you might be able to use the violation as leverage in settlement negotiations.
The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects the rights of individuals with outstanding debts to credit card companies, merchants, or other creditors. This federal law prohibits a debt collector to use profane and obscene language, threatening actions, unfair tactics, harassment, and deceptive techniques to collect money on behalf of the original creditor. However, this act cannot erase the debt nor restrict the lender from taking any necessary legal action. If a debt collection agent disobeys this act, the borrower will be allowed to file a lawsuit seeking damages.
In Arizona, there is a criminal statute similar to the Fair Debt Collection Practices Act (FDCPA); however, it does not permit an individual to sue the debt collection agency for violating the law. A debt collection agency is defined by Arizona law as someone who collects any actual or alleged debt, including business owners who obtain payments from consumers using different identities. All debt collection agencies in Arizona are required to obtain a license and give a bond before starting their operations.
All the employees of the debt collection company should conduct their business in an open, fair, and honest manner. They should not be involved in any misleading, harassing, unfair, oppressive, unreasonable methods of collection. A reliable Phoenix bankruptcy lawyer can help you assess whether the debt collection companies operate legally or not.
The Arizona law forbids a debt collector to send to a debtor any communication that was written in the same way as any form of judicial process from a lawyer, government entity, or court. It is also prohibited to represent that the bill or debt collector maintains a legal department unless the collector is authorized to practice the law. Furthermore, it is illegal to attempt any collection of fees, such as court expenses and attorney’s fees that are not required to be paid by the debtor. The collector is not allowed to misrepresent the amount of the outstanding debt, or to falsely state that the borrower will be charged with additional service payments, investigation fees, and attorney fees for any unpaid debt. Debt collectors are prohibited to claim and give a notion that the assigned collector represents the Arizona state or government. An experienced Phoenix bankruptcy attorney can enlighten you regarding the debt collection laws.
Violators of the debt collection statute in Arizona will be charged with class 1 misdemeanor. Since this is a criminal statute, the debtor who has been abused by the debt collection agency must report the violation to the county or local city prosecutor. The debtor does not have the legal rights to file a complaint or lawsuit against the collector for disobeying the law; but because of the Fair Debt Collection Practices Act (FDCPA), he or she can still file a case under the federal statute to become eligible for money damages.
Dealing with debt collectors can be complicated and stressful. You must be knowledgeable about debt collection laws to be able to prevent abusive debt collectors from taking advantage of your situation. You need to be careful of scammers who are trying to contact you and deceive you through illegal collection calls. You can contact our competent Phoenix bankruptcy lawyers at Phoenix Fresh Start Bankruptcy Law Firm to help you figure out the best option in handling your debts, negotiating settlements, and responding to a lawsuit for unpaid debts. We will guide you throughout your road to debt recovery and repayment.