You receive a phone call, usually at night or your work place, and a rude person on the other end starts demanding your name and information confirming you identity. When you ask who the person is, you may get their first name and that they are trying to collect a debt that you owe. You are threatened with a lawsuit if you do not immediately agree to a payment plan.
Step back, take a deep breath and remember you have certain rights. You are entitled to request the name and information from the caller. Debt collectors have to follow certain rules under the Federal Fair Debt Collection Practice Act. In addition, many states may also have adopted a Debt Collection Act.
You are entitled to ask for and get the following information:
- A copy of any correspondence that has been sent to you regarding the alleged debt;
- Written proof of the alleged debt, age of the debt, amount of the debt and the name of the original creditor; and
- Proof of any assignment of the alleged debt from the original creditor to the debt collector.
It may be that while you incurred the debt, legally you do may not owe the debt. Every state has a ?statute of limitations? which limits the amount of time the owner of a debt may file a lawsuit against you to collect. For example, if the debt arose in Texas pursuant to a standard contract and it is more than 4 years old (starting from the date when the debt first became due), the owner of the debt can no longer collect the debt from you. While your credit report will likely still reflect non-payment for up to 7 years, you do not have to pay the debt. If you receive such a phone call or demand letter, consult with your attorney to determine your rights and obligations.
Leonard Schneider is a partner in Liles Parker PLLC in the Houston, Texas office. The firm focuses on health care audits, business contracts, general corporate and business litigation matters and municipal law. He can be contacted at email@example.com or at the firm website www.lilesparker.com. The Houston office number is 713-432-7474