Debt Collection Frequently Asked Questions

• Is there a way to stop creditors from harassing me?
• What is the “Fair Debt Collection Practices Act?”
• What is a Complaint and what is a Summons?
• What is an Answer and what is a Default Judgment?
• Can a creditor take my house or other property if I don’t pay an unsecured debt?
• Will I go to jail if I don’t repay an unsecured debt?
• What is a judgment and how can a creditor collect on a judgment?
• What is a wage garnishment?
• What is a bank levy?
• What is a judgment lien and how is it created?
• Are there any special protections afforded to those in the military?

Is there a way to stop creditors from harassing me?

Creditors and debt collectors have the right to contact you when attempting to collect on a debt. However, these communications are subject to the Fair Debt Collection Practices Act and, in some states, to state consumer protection laws that supplement the FDCPA.

If you want a collector to stop contacting you, you can send the collector a Cease and Desist letter demanding the collector stop all communications with you. This should stop all communication from a debt collector unless the collector or creditor files a lawsuit. In this case, the collector or creditor can communicate a notice of legal action to collect on a debt. Creditors or collectors often file a lawsuit after receiving a Cease and Desist letter, so most debt relief professionals advise against sending these letters.

Additionally, in most cases, collectors cannot contact you at work if they are informed that your employer disapproves of you receiving such calls at work. A collector who continues to call you at work after being informed of your employer’s disapproval may be in violation of the FDCPA.

Collectors, and in some states creditors, cannot harass, abuse, lie or treat you unfairly when attempting to collect a debt. If you suspect that a collector’s communication during their collection attempts becomes abusive, deceptive, unfair or harassing, you should consult an attorney with experience in responding to FDCPA violations.

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What is the “Fair Debt Collection Practices Act?”

The FDCPA is a federal law that provides residents of all states with considerable rights and protections against abusive, unfair and deceptive debt collection practices by debt collectors. Examples of debt collection practices prohibited by the FDCPA include using profane language, lying and calling a debtor at work if the debt collector knows the employer disapproves. The debt collector must also protect the debtor’s privacy by not disclosing the debt to others such as friends, family members or co-workers.

A debt collector, as defined in the FDCPA, is anyone who regularly collects debts on behalf of an original creditor. Original creditors, such as credit card companies and banks, are not considered debt collectors when they attempt to collect debts owed directly to them. Therefore, original creditors are not covered under the FDCPA.

The FDCPA covers only consumer debt, which includes personal, family and household debt, but not business debt or any debt incurred for business purposes. Common types of consumer debt are credit card debt, automobile loans, home loans, utility bills and medical debt.

For more information on the FDCPA, including what debt collectors can and cannot do and what you can do if you believe a debt collector violated your rights under the FDCPA, please visit our FDCPA FAQ page.

For more information about local debt collection and consumer protection laws, please select your state from the menu on the left.

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What is a Complaint and what is a Summons?

When a creditor or collector initiates a lawsuit, they generally must prepare a complaint. A complaint is basically a written statement filed by the plaintiff (e.g., the creditor or collector) informing the court of the issue, briefly stating their case and telling the court what they want.

A summons is a document that usually must be delivered to you in a particular way (i.e., “serving a summons”) with the complaint. Basically, most courts use summonses as a way of informing you in writing that someone filed a lawsuit against you. The summons also informs you of your right to respond to the plaintiff’s complaint.

A summons will typically provide helpful information about the lawsuit and the court at which it was filed. For example, the date when your answer is due, should you choose to file one, and the date of any hearing are usually included on the summons. You should also see the Clerk of Court’s (also called a “prothonotary” in some states) contact information on the summons. Contacting the Clerk can be helpful if you have any particular questions about the summons, answer or complaint.

As with all legal matters, if you need help of have any questions when you receive a summons, you should contact an attorney licensed in your state.

Sample Summons and Complaint documents

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What is an Answer and what is a Default Judgment?

An answer is exactly what the name implies; it is your response to the creditor or collector’s complaint. State laws differ regarding the necessity of filing an answer. Generally, you may indicate in your answer whether you agree or disagree with each numbered paragraph in the complaint.

In most states, if you fail to respond to the creditor or collector’s complaint, the court will issue a “Default Judgment” against you. In other words, because you didn’t respond, the court may automatically conclude that you have no objections to the complaint.

For more information regarding filing an answer, click here for a great resource from an organization based in Washington. Although it addresses Washington residents, much of the information is generally applicable to residents in other states. Of course, you will need to consult an attorney licensed to practice in your state if you have any questions specific to your situation. Although it is not intended to be a substitute for contacting an attorney, you may also post your question on the forum by clicking here.

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Can a creditor take my house or other property if I don’t pay an unsecured debt?

Normally, for unsecured debt (like personal credit cards) the answer is “no.” However, if you default on a “secured debt,” the laws of your state may allow the creditor or collector to repossess that item with which the debt is secured. Be careful, some store credit cards are actually secured with the items the card was used to purchase. If you have any store credit cards, you should review the Terms and Conditions of the card agreement or contact an attorney licensed to practice in your state to determine whether or not the card is “secured.” However, in some instances and in some states, a creditor may be able to force foreclosure of real property (typically only when it’s investment property) to satisfy a judgment.

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Will I go to jail if I don’t repay an unsecured debt?

You will not go to jail simply for not repaying an unsecured debt. There is no such thing, at least since the 1800’s, as a “Debtor’s Prison” in the United States. However, you could be jailed for willfully violating a court order. This may include actions such as hiding from creditors or concealing property to avoid paying a creditor or collector after that creditor or collector obtained a judgment in court against you.

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What is a judgment and how can a creditor collect on a judgment?

A judgment is basically a decision by a court as to who won a case. If the creditor or collector receives a judgment in their favor (i.e., if they win in court), then they may seek to enforce or collect on the judgment. To actually enforce the judgment, the “judgment creditor” (i.e., the creditor that won in court and received a judgment against you) must typically bear the time and expense to go back to court and attempt to have the court allow the judgment creditor to enforce the judgment.

The available enforcement options vary from state to state. Some of the more common means of enforcing a judgment are wage garnishment; bank levy and judgment lien.

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What is a wage garnishment?

Wage garnishment is when a judgment creditor has a debtor’s employer withhold some of that debtor’s net wages and pay that withheld portion to the judgment creditor. Wage garnishment is handled differently in each state. Some states do not even permit wage garnishment (e.g., Texas & Florida for “head of household”).

Furthermore, Federal law only allows up to 25% of a debtor’s disposable income to be garnished. However, that percentage is a ceiling, or maximum. Some states permit a significantly lower percentage (e.g., California allows no more than 10%). Additionally, some judges may award a garnishment at a much lower percentage of net income than allowed under state or federal law when dealing with someone experiencing legitimate financial hardships.

In some states, neither the judgment creditor nor your employer are required to give you notice prior to garnishing your wages. However, it may be illegal, depending on the circumstances, for an employer to fire you because your wages have been garnished unless your wages from the same employer are garnished for three different judgments during a twelve-month period. Ultimately, you should consult an attorney for handling of such matters because, as indicated above, laws vary greatly from jurisdiction to jurisdiction.

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What is a bank levy?

Bank levies and bank garnishments are generally the same thing. Typically, it occurs when the judgment creditor discovers that the debtor has a significant or substantial amount of money in bank accounts. Bank account garnishment is similar to wage garnishment, except that the judgment creditor sends garnishment papers to your bank instead of to your employer.

In most states, money from social security or other assistance sources is not subject to garnishment or levy. However, unlike your employer, your bank will not claim your automatic exemptions for you -- you must claim them. You should consult an attorney at the first sign of a bank account garnishment attempt.

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What is a judgment lien and how is it created?

A judgment lien is a lien a judgment creditor may be able to obtain against the real or personal property of a debtor. If the debtor sells property that is subject to a lien, the amount of the judgment lien is satisfied at the time of the sale -- before the seller/debtor hands over the title to the buyer. In other words, generally, a judgment lien is something that is placed on or attached to a debtor’s property and is paid off once the debtor sells the property.

Generally, a judgment lien placed on judgment debtor’s real property remains in place until either the statute of limitations for the lien runs or the debtor sells their property.

Typically, a judgment creditor will only place a lien on the property (e.g., the house) of a judgment debtor after obtaining a judgment against the debtor and the debtor either refuses to pay or is unable to pay the judgment.

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Are there any special protections afforded to those in the military?

Yes, the Service Members Civil Relief Act of 2003 (SCRA) is a federal law that provides important rights to military personnel when they enter active duty. If you have any questions about the SCRA, you should speak with your base Judge Advocate General.

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