by Francine Traiger Poor

 If you've faced a financial catastrophe, or just  fallen behind on some bills, you're well aware that debt collectors are eager to collect those payments.  But some collectors go over the line, threatening to have the person arrested, making improper bank withdrawals, intimidating people and making harassing phone calls. Many debt collectors buy old debts from companies or lenders for pennies on the dollar. For them, it’s a business transaction. They are doing whatever they can to get you to pay the debt.

Ethical debt collectors are necessary. According to one study,  the collection industry saved the average American household $351 in 2005. That is how much money households would have spent if businesses were forced to raise prices to cover bad debt. The bottom line here is that if you owe money, you should make every effort to pay off the debt.

But you still need to know your rights. "Most people are not aware of their rights. And unfortunately debt collectors take advantage of that fact," says Joe Ridout of Consumer Action.

The Fair Debt Collection Practices Act requires that debt collectors treat you fairly. This doesn't mean you won't have to pay your legitimate debt. But here are some basic rights:

1.     A debt collector cannot call you before 8 a.m. or after 9 p.m., unless you agree.

2.     You cannot be contacted at work if the collector knows your employer disapproves.

3.     If you don't want to hear from a debt collector, write a letter telling them to stop. By law, they have to. Remember, the debt won't go away and you can still be sued.

4.     The debt collector can contact your attorney -- if you have one. If not, your friends and family can be asked about how to get in touch with you.

5.     A debt collector can't misrepresent the amount of your debt.

6.     A debt collector cannot use profane or threatening language

7.     Debt collectors can't say that they will put a lien on your property or file a lawsuit unless the agency really means to do that and it's legal.

8.     Collectors can't legally claim federal benefits, such as Social Security or your retirement accounts, like your IRA or 401(k). The exception to this rule is federal student loans.  If you’re delinquent on those, debt collectors can garnish your Social Security wages and prevent you from renewing any state licenses.

Once you're contacted by phone, you have the right to get a notice that outlines your debt, who you owe money to, and what action to take if you don't owe the money. Keep in mind that a debt collector can collect a debt owed by an ex-spouse. If the debt was incurred while you married, you may be liable for the debt after a divorce even if the divorce papers state your spouse is responsible for paying off the debt.
 If you don't owe the money, dispute the debt. A debt collector must send you written notice telling you the amount of money you owe and the name of the creditor. If within 30 days of receiving this notice you send a debt collector a letter stating you do not owe the money, a debt collector may not contact you. It's a good idea to send this letter certified mail, so you'll have proof that the debt collector received it. A collector could renew collection activities if proof of the debt, such as a copy of a bill, is sent to you.

Keep in mind that some debt has an expiration date. There is a limit to how long collectors can legally collect your debt. Generally this limit, which is called the statute of limitations, is 6 years, but it can be longer.  Be careful not to accept new credit offers from an old creditor you never paid.  Once that creditor renews your credit relationship, the clock starts ticking all over again on the statute of limitations.  Also, according to federal law, you have no legal obligation to pay any debt that has had no activity in the last 7 years.  There’s still a moral obligation to be a good citizen and make good for the debt that you have, but you’re not bound to pay it according to the law.

If you think you've been treated unfairly by a debt collector, take action and contact an attorney. Once you have an attorney, a debt collector must contact the attorney, rather than you. An attorney may be able to answer questions regarding your rights under the Fair Debt Collection Practices Act and specific debt collection laws in your state.