What Does the Fair Debt Collection Practices Act (FDCPA) Cover?

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Fair Debt

The Fair Debt Collection Practices Act (FDCPA) was implemented to eliminate the wage levied on someone via the unfair means of debt collection. It became effective in March 1978, formed to eradicate abusive and misleading debt collection practices. During the IRS tax settlement and IRS back taxes owed uses the FDCPA to protect debt collectors from unfair competition, enabling consistent state action. It also protects buyers from abuses in debt collection. In other words, other than this particular federal law there are also state laws that are made to put restrictions on abusive or illegal debt collectors and protect consumer finances as well as those who are collecting the taxes or debts via fair means.

To better understand how IRS tax settlement is possible by using Fair Debt Collection Practices Act on the wage levy, dive into the following article on the same.

What is FDCPA or Fair Debt Collection Practices Act?

FDCPA, or Fair Debt Collection Practices Act, comes in the category of Federal Law. When debt collectors are collecting various kinds of debts, including  IRS back taxes owed or wage levy on the consumer, it puts several limitations on the way they act (what they do or say). It covers the federal Fair Credit Reporting Act. This means that how debt collection is done is registered in the reports made on the credits, thus protecting consumer rights.

This federal law controls debt collection practices and also puts restrictions or prohibitions on the debt collection companies if they use any offensive, foul or deceitful means or act abusively to collect debts from the debtors.

This law only covers the collection of Mortgages, Credit cards, Medical debts, and any other debts specifically used for personal, family, or household purposes. It, thus, does not cover business debts or collections made by the creditors who initially credited to the debtor.

The list of Fair Debt Collection Practices Act covers collection agencies, debt buyers, and lawyers. These professionals collect the wage levy on the consumers on a daily basis as the creditors to their customers. This is a routine factor of their interaction. Businesses that acknowledge and collect the due debts from creditors or other firms from the past are also known as debt collection agencies, debt collection companies, or debt buyers. These too come under the FDCPA.

So, if you are any of the above-mentioned by your profession or making an IRS tax settlement, here are a few things to keep in mind before going out to collect wage levy from debtors or to consider in your investigation-

  • Never contact the debtor at the odd time or place-

This is to say, you shall avoid calling at an unagreeable timing or, in other words, the time that may sound odd or inconvenient to you like at 3 am! Neither shall you ask them to meet in an uncomfortable or unusual place, like an empty godown.

Under the Fair Debt Collection Practices Act, a debt collector is restricted from contacting the debtor between 9 pm to 8 am. If the collector knows that debtor isn’t permitted or able to converse during working hours, then also, the collector is prohibited from contacting the debtor.

  • Harassment of any kind shall be avoided

The person with the debt might already be under pressure. Under federal laws, debt collectors are not permitted and are prohibited from harassing the debtor in any form, be it on a call or through an SMS. No form of harassment is legally acceptable.

  • Contacting the representative attorney

If the collector of the debt knows about the debtors’ attorney, then the collector shall avoid contacting the debtor directly. In the presence of the attorney, who is the representative of the debtor, the debtor shall make sure that the collector has access to the contact and details of the representative. Only then shall this be under legal concern.

These are the restrictions that are put on the debt collectors while they perform their act of collection of the wage levy on the debtors, and understanding this can protect both the collector and debtors with the aid of the judiciary.

It is also crucial (and can save the person involved in debt) to keep all the necessary letters, emails, notices, and records during the conversation and period of debt collection. This will help during IRS tax settlements. IRS back taxes owed would make sure to comply with these pointers. This leads us to another part of the FDCPA, that is, “in writing”.

If a debtor asks the collector not to contact you in writing, then the collector shall not contact you again. But, there are some legal rules, protecting the debt collectors’ interests under the Fair Debt Collection Practices Act. The collector can contact you in the following situation-

  • To tell you that there will be no further contact necessary
  • To notify you that legal action, like a lawsuit, is going to be taken now by the collector, on the debtor

This means that a debt collector always has the right to pursue legal methods to collect the owed debt from the debtor. In most cases, it is a lawsuit against the debtor. In other cases, a debt collector might inform the credit reporting company about you, providing negative comments on the debtor.

Fair Debt Collection Practices Act also covers the information that the collector must extend to the debtor if the collector is claiming that the debtor owes the payment on a debt. This info, provided by the creditor, must include, under the legal protection, the following:

  • The owed amount by the debtor
  • Argumentation can be done on the debt
  • The request to know the name and address of the actual creditor (if different from the current creditor) can be made by the debtor

The initial contact made by the creditor must include these three things on their initial extension of the claim. IRS back taxes owed make sure of these things. The representative will make sure that within the five days of the first conversation, these things must be provided, if not already done, in the form of a written notice, by the creditor. A debtor’s interests are legally protected via this law. The debtor might argue over the debt amount with the creditor. They can also ask for more information regarding the same in case if the debtor isn’t sure about the owed debt. This shall be done within 30 days in writing from the initial claim with the required information. Until and unless the information provided by the creditor or debt collector is extended to the debtor in writing, the confirmation or verification regarding the claimed debt isn’t done.

Details like name, address, and other details, can be asked for by the debtor and must be provided by the debt collector. Until the asked details (within the 30 days) are not given, the collection of the debt or actions related to it, shall not be executed and must stop entirely by the collector. Once the information is gathered, verification of the claim is also done on the part of the debtor, and thus, the period of debt collection is initiated.

This is all that the Fair Debt Collection Practices Act (FDCPA) covers to protect the interests of both the debtors and the creditors of the payment or debt collectors.

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