financial papers on a desk

Debt Collection: Your Rights

Last post we discussed what to do if you don’t believe you owe the debt.  Today, let’s talk about your rights and what debt collectors can and cannot do.

When attempting to collect a debt there are certain practices that are off limits for debt collectors.  Debt collectors are not allowed to harass, oppress, or abuse you or anyone else they contact when attempting to collect a debt.  They may not lie, make false claims or statements, or use unfair practices when trying to collect a debt.  Debt collectors are also barred from saying you will be arrested if you don’t pay your debt.  

Can my pay or bank account be garnished to pay a debt?

If you don’t pay a debt the creditor or its debt collector can sue you to collect what you owe.  If the creditor wins, a judgement against you will be entered by the court.  This judgement will include information on the amount of money owed and can allow a garnishment order.  A garnishment order would allow for funds to be taken from your bank account or wages to pay the debt.

Can my federal benefits be garnished?

Federal benefits such as social security benefits, veterans’ benefits, and civil service benefits are exempt from garnishment except under specific circumstances including to pay unpaid child support, alimony, delinquent taxes, or student loans.

What happens to debt when the borrower dies?

Debt does not disappear when a person passes away.  Generally, the deceased person’s estate owes the debt and debts owed are paid from this estate.  However, you could be responsible for the debt if you were a co-signer, reside in a community property state, are the spouse of the deceased person and state law requires you to pay, or were the executor of the will and did not comply with state probate laws.  

When collecting a deceased persons debt who can debt collectors contact? 

Debt collectors can contact the deceased person’s spouse, parents of a minor child, guardian, executor, or administrator to discuss debts.  They may also contact another relative to obtain the name, address, and phone number of the person authorized to pay the debt however, they may not discuss anything else about the debt with this relative. 

Can I stop a debt collector from contacting me about a deceased person’s debt?  Yes.  See my first post of the series for more information.  http://blogs.ifas.ufl.edu/fcs/2018/01/04/understanding-debt-collection/