Understanding the Rights & Limitations of Creditors
Sept. 15, 2022
When bills begin to pile up, you may start receiving letters and phone calls from creditors asking you to settle your debt. Every time you go to your mailbox or pick up the phone, you may experience a lot of stress and anxiety.
Fortunately, creditors cannot simply do whatever they want when trying to collect a debt. There are strict laws that govern the rights and limitations of creditors and debt collectors. If you believe creditors have crossed the line while attempting to collect a debt, Law Office of Jason Cline can help.
As a strategic bankruptcy attorney, I help clients explore their options for getting debt relief and stopping creditors from continuously calling and harassing them. Also, I have the resources, knowledge, and skill set necessary to assist your specific situation. From my office in Albuquerque, New Mexico, I serve clients throughout the state, including but not limited to Santa Fe, Rio Rancho, and Los Lunas.
Consumer Rights Laws
As a debtor who deals with creditors and debt collection agencies, you need to understand what creditors and collectors can and cannot do under federal and state law:
Fair Debt Collection Practices Act (FDCPA). The FDCPA restrains third-party parties hired by individuals or entities to collect debt in how they go after a debt. In particular, the federal law regulates when and how often collectors can contact debtors. The FDCPA also prohibits collectors from engaging in harassing or abusive practices, making false representations, and using unfair or unconscionable means when collecting debts, among other things.
Fair Credit Reporting Act (FCRA). This federal law promotes the fairness and accuracy of the information in a debtor’s credit file and protects the consumer’s privacy and confidential information. For example, the FCRA requires reporting agencies to correct or delete incomplete or inaccurate information on the consumer’s credit file.
Both the FDCPA and FCRA are fundamental consumer rights laws enforced by states throughout the country, including New Mexico. New Mexico law also puts a time limit on creditors and debt collectors who want to seek legal action against the debtor. The statute of limitations for such lawsuits in New Mexico is from four to ten years, depending on the type of debt.
While creditors and debt collectors have the right to contact you, they cannot use threats, abusive practices, harassment, or deception to collect the debt. Other things debt collectors cannot do include:
Contacting you at an unreasonable time or place
Using violence or threatening to use violence against you, your family, your property
Using a false creditor/company name
Using obscene or profane language
Calling you repeatedly to harass or annoy
Knowingly misrepresenting the amount of your debt
Lying that you committed a crime and/or will be arrested
Attempting to collect more than you actually owe
These are not the only debt collection actions that are prohibited under federal and state law. If you are dealing with creditors or debt collectors and want to understand their rights and limitations, seek legal counsel from an attorney. Your attorney will protect your rights and help you deal with creditors and collectors in the most effective manner possible to stop them from poisoning your life.
Bankruptcy Effects on Creditor’s Rights
One of the many reasons why debtors file for bankruptcy is to stop creditor harassment. When you file for bankruptcy, the court issues an automatic stay that orders creditors to stop all debt collection actions. Thus, a bankruptcy filing has a major impact on creditors’ rights as they are unable to call the debtor, send them letters, or even initiate legal action against the debtor.
Creditors who continue to harass debtors or otherwise violate the terms of the automatic stay can face penalties from the court.
Get the Legal Support You Need
As a bankruptcy attorney whose job is to protect the rights of debtors, I understand how stressful and anxiety-inducing those calls and letters from creditors and debt collectors can be. At the Law Office of Jason Cline, I help clients explore their debt relief options and put an end to creditor harassment. Contact my office in Albuquerque, New Mexico, to get the legal support you need and discuss your legal options during a free consultation. I proudly serve clients in Rio Rancho, Santa Fe, Los Lunas, or anywhere throughout the state of New Mexico.