If you are receiving calls, letters, or even in-person visits from a collections agency, then you are not alone. While not a pleasant position in which to be, many debtors have to deal with collectors who have come into possession of their defaulted debts.
While collections tactics may be frustrating, however, they cannot cross over onto the other side of the law into abuse or harassment. Debtors in New York are protected against unfair collections practices mainly under two different laws: the New York State Debt Collection Procedures Law and the federal Fair Debt Collection Practices Act.
Following are legal considerations about some of the common collections concerns for debtors in New York:
Statutes of Limitations: A statute of limitations on a debt is the time period following the last payment made during which a debtor can be sued successfully for payment. In other words, if a collector (or creditor) contacts you about paying a debt that is older than the statute of limitations, then you have an absolute defense and do not need to pay.
In New York, the statute of limitations is six years for both written and oral contracts. Remember, however, that this does not affect how long debts may be listed on your credit report. Most negative items may be retained on your reports for seven years.
Collector Information: Collectors must be open and honest with you about who they, and that their purpose is to collect your debt. Within five days of contacting you for the first time, they must mail you a written notice that includes the amount of money that you owe, the name of your original creditor, and information on how to dispute your debt.
Any misrepresentations made by collectors about their identities are against the law. Collectors cannot give false names, lead you to believe that you have committed a crime, or provide any other false or misleading statements. They also may not hide their identity to get you to pay for a collect call or telegram.
In addition, any correspondence that you receive from a collections agency cannot be purposefully misleading. For example, letters cannot be made to look as if they are official legal documents or from a government agency
Disputing a Debt: If you do not believe that you owe the debt in question (for example, if it already has been paid or if you do not think that it is yours), then you should write to the collections agency within 30 days to explain the situation. Do not send original documents, but instead provide copies of everything that supports your position.
The agency may not contact you again without providing its own proof of your liability. In the event that the debt is not yours, they may ask you to verify your identity.
Contacting You: Collectors may contact you both by phone and by mail, both at your home and at your place of employment. They also make rare in-person visits. All tactics are legally allowed unless you state your preferences otherwise.
Collectors may call between 8am and 9pm local time, unless you specify another time that would be more convenient for you. There is no specific limit on the number of calls that you may receive, but an excessive amount in a short period of time could be construed as harassment.
If you wish to cease calls or correspondence at work, then you should state this in writing. (As a side note, any and all information that you provide to collections agencies should be by mail. Sent certified and with a receipt is the best idea, because such documentation will be important should legal action be taken against you.)
The same action should be taken if you would like all contact to be stopped completely. Proceed with caution is this area, however. While it might seem like the perfect quick-fix to your problems, insisting that collectors stop calling and writing might very well cause them to go after your debt through other means – legal action.
If you have representation by an attorney, than collectors generally should contact your attorney instead of you directly.
Harassment: In addition to the limitations explored above, collectors may not use obscene or profane language, and they may not threaten violence. They also cannot threaten to take any further action that is illegal (like publishing a “black list”), that they need a court order to enforce (like wage garnishment), or that they really do not intend to take.
Your Privacy: Collectors may contact people close to you, including your employer, but generally only once. They may do so to find out your address or phone number, or to verify your employment.
The collector may not disclose any financial information whatsoever to anyone other than you, and certainly they cannot give false information. Your privacy must be upheld at all times, no matter what the method of contact may be.
You should not receive any correspondence that would immediately reveal collections proceedings to anyone else. For example, a collector may not contact you via postcard.
Paying a Collector: If collections actions are being taken against you, then paying your debt is your best option – certainly better than being sued and/or having to file bankruptcy. While collectors do not have to accept less than a full payment by law, they usually will work with you on a payment plan if you cannot pay in full. Ask for one in writing.
Collectors cannot collect any money that exceeds your debt. They also may not cash a post-dated check before its date has come. Both actions are against the law.
Contact by Creditors: The Fair Debt Collection Practices Act only must be upheld by collectors, and therefore does not apply to creditors. However, if you are being contacted by your original creditor on a debt for repayments, then state law does offer you some protections.
- Deceive you into believing that they are law enforcement officials or associated with the government.
- Collect money from you in excess of your debt.
- Reveal information about your debt, or threaten to reveal information, that would affect your reputation.
- Report your debt to the credit agencies while failing to report any disputes that you may raise.