Both data collection agencies and debtors have certain rights that cover the following issues: the creation of debt; disputes regarding the payment or repayment of debt; and methods of debt collection. Most people have a reasonable amount of debt. If you are a credit card user, or have taken out a personal unsecured loan, or have a secured loan, a car loan, or a mortgage, you are indeed a debtor. In the United States, most that consist of credit card debt, car loans, student loans, and home loans.
Various laws and regulations project debtors during various stages of paying debt and debt collection. Laws like the “Truth in Lending Act” and the “Fair Credit Building Act “protect you during the repayment of debt and the collection of debt.
If you quit paying on your debt, creditors have a number of options at their disposal, such as;
- liens against your property
- levees against your bank account
- garnishment of your wages
- repossession of the property used as collateral for the debt
The FDCPA (Fair Debt Collection Practices Act) regulates what a creditor may and may not do when attempting debt collection. This is a federal law that was enacted to control debt collectors and prevent debtors from abusive conduct by collection agencies and other debt collectors. The FDCPA imposes severe financial sanctions on collection agencies that violate the Act. In addition to the FDCPA, there are other federal regulations that come into play for both the creditor and debtor.
There can be times when a creditor thinks that you are responsible for a debt in error. This should not surprise you as identity theft is rampant. In the event of an incorrect debt assignment, you must take important steps to clear your name with the credit reporting agencies.
In short, both debtors and creditors have enumerated rights that must be followed.