Guide to Debt Collection Law Firms
What is a Debt Collection Law Firm?
Although some debt collection law firms protect the rights of people involved in debt, the majority of these law firms help in commercial and business collection litigation. Most businesses either succeed or fail based upon how they receive debts from consumers, and a debt collection law firm can help a business owner through different processes of obtaining owed debt.
What Debt Collection Technique might a Debt Collection Law Firm Suggest?
There are different strategies to help a business owner collect debt, and some of these strategies are less or more aggressive depending on the circumstances. The following lists are strategies different debt collection law firms may suggest:
Most debt collection lawyers will inform a business to make copies of every check received by a customer for three very important reasons:
• Accounting organization
• The action may prove a customer is constantly changing back to avoid debt collection
• Provides figures to the attorney for the money that can be collected in the future
If you undergo a bank attachment, the debtor’s bank account will most likely become frozen immediately. This action doesn’t guarantee a business will receive payments, but the action does gain the debtors attention and willingness to initiate a trial. Your lawyer can order an attachment either with notice to the debtor or ex parte (meaning without notice). If a lawyer suggests ex parte, this means the debtor has failed to respond to a petition, the case has been brought to a judge, and the judge has allowed the action by default.
This measure allows a sheriff to take custody or a debtor’s personal property. This type of collection measure is usually suggested by a debt collection law firm if the debtor’s means of income include cash payments or if the debtor operates a cash business.
A sheriff is entitled to collect all cash payments as they come into the business, and most courts will allow this collection method ex parte.
Personal Property Attachments
A debt collection law firm may suggest this measure to allow the company to put a lien on their furniture, equipment, or other item. These attachments are usually posted at the debtor’s place of business by a sheriff, and coworkers may witness the posting in some cases.
There are other types of strategies performed by debt collection law firms, and you’ll want to discuss all options with your lawyer. However, you should know as a business owner that debt collection law firms are restricted in the types of measures they can use to collect payments.
What is the Fair Debt Collection Practices Act?
This act falls under the Federal Trade Commission (FTC) and strictly prohibits a collection agency, lawyer who collects debt on a regular basis, or companies that buys delinquent debts from using abusive, unfair, or deceptive measures for collection. As a business owner, you need to know that any lawyer working for a debt collection law firm must strictly abide by the provisions under the Fair Debt Collection Practices Act (FDCPA), and this act covers all personal, family, household, credit card, automobile, and medical debts.
What does the FDCPA restrict a Debt Collection Law Firm from doing?
If you are a business owner or similar person trying to collect debt, you’ll want to abide by the same rules your debt collection law firm must follow under the FDCPA as well. Any evidence or harassment or deception will undoubtedly affect the case and even pardon the defendant from payments.
For a complete list of regulations under the FDCPA, visit the official government website of the FTC and click under the Consumer Protection tab at the top of the page.
A debt collection law firm or similar collection agency can only contact a debtor at convenient times and places. A convenient time classifies as any time from 8:00 in the morning to 9:00 in the evening, and a debt collector may contact a debtor at work unless told in writing otherwise. Additionally, a debt collection law firm or similar agency cannot contact anyone else about your debt unless for information about your address, home phone number, and your employment address.
The following practices are prohibited under the FDCPA, and if you are business owner, you should abide by the same procedures as your debt collection law firm:
1) Harassment- debt collectors may not harass, oppress, or abuse a party in any of the following ways:
• The use of threats of violence or other harm
• By publishing a list of names of people to owe significant amount of debt
• By using inappropriate or obscene language
• Repeatedly call a debtor
2) False Statements- Debt collection law firms may not lie in any of the following ways:
• claiming that the debtor has committed a crime
• claiming that they work for a credit reporting company
• lie about the amount a debtor owes
• state that the legal forms they sent the debtor aren’t legal forms when pursuing a default action
• state that a debtor will be arrested if they fail to make payments
• state that they’ll seize, garnish, attach, or sell the property unless they are actually allowed to
• providing false credit information about you to a credit reporting company
• send a debtor anything that appears to be a court document but actually is not
3) Unfair Practices- a debt collection agency or debt collection law firm may not use unfair practices to obtain debt, such as:
• trying to collect interest, fees, or other charges unless a contract or state judge allows them to collect the debt
• depositing a post-dated check too early
• contacting a debtor by postcard
4) Threaten to Garnish Federal Benefits- a debt collection law firm is restricted from trying to collect any of the following federal benefits except in certain situations:
• Social Security
• Supplemental Security Income
• Veterans’ Benefits
• Service Members’ Pay
• Civil Service, Federal Retirement, or Disability Benefits
• Student Assistance
• Railroad Retirement Benefits
• Merchant Seamen Wages
• Longshoremen’s and Harbor Workers’ Death and Disability Benefits
• Foreign Service Retirement Benefits
• Any compensation for injury or death
• Federal Disaster Assistance