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505-255-KOHL or
505-553-1517

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karole@karolekohllaw.com

Before emailing, faxing documents or providing any information on your case please read this Disclaimer.

Consumer Law

Fair Debt Collection Practices

When a business or a person is owed money, the way they go about trying to collect the debt is governed by the Fair Debt Collections Practices Act.  There are times, places, and manners in which a debt collector may communicate with you. Once you inform a debt collector to cease communications with you, there should be only a few occasions when they contact you to provide you specific information but further demands for payment must be stopped.


A debt collector may not harass you, oppress you, abuse you, mislead you or lie (misrepresent themselves) to you or use deceptive means to recover a debt owed.   


The debt collector shall not use unfair or unconscionable means to collect or attempt to collect any debt.  For instance, unless your contract allows the creditor to include additional interest, fees, or charges, or extra expenses to the principal (the amount you originally owed), it would be a violation of the  Act to charge you for any additional charges. 


In today’s market and downturn in the economy, many folks are falling behind in their financial obligations.  It makes sense that businesses will make collection attempts, but they must follow the law in doing so.    


The Fair Debt Collection Practices Act determines how businesses or their representatives (or the business they sell the debt to) may legally demand the money or goods be returned to them. 
Here are only several examples of violations of the Fair Debt Collection Practicds Act. 


Example 1:  If you owe ABC company $100, and you owe an additional $50 in interest, you would owe that company $150.  If ABC sued you in court, and you could not pay the $150, and ABC sold the debt to XYZ company, and XYZ company said you owe XYZ $200 because they added  interest and fees of $50.00, that would be illegal because legally you still owe just the $150.00 not the added $50.00  of XYZ’s added fees.    


Furthermore, XYZ would have to prove to you that you had an outstanding debt of $150 to ABC and someone would have to testify to the debt.  Sometimes this is done fraudulently  I can help assess your case to ensure your case is being handled properly. 


When creditors go beyond their legal rights, you may have a case against them for unfair practices. 


Example 2:  If ABC took you to court and lost, they cannot sell the debt to another party.  If they did so, it would be a violation of the Act, and you may have a case against them.


There are many other ways in which creditors go about attempting to collect on debts, and some of the ways may not be legal.  When you are sued, you must respond within a certain time frame, or you could lose by default. 


Generally, you lose by "default" because you failed to participate or respond when the creditor like ABC or XYZ shows up in Court and tells the Judge their side of the story.  When the Judge does not hear your side, he may think that you just do not want to pay the debt.  When you are sued, always show up to tell the Judge your side of the story, otherwise you may end up automatically owing the wrong amount of money. If that happens, then you may find it necessary to hire an attorney to represent you in setting aside the Judge’s prior decision.