Services: Consumer Law: Debt: Collections

What can a bill collector do to me if I fall behind on a debt?

If you fall behind on your payments for a purchase or to repay a loan, your bill collector may:

• Contact you in writing, by phone or otherwise to demand payment, accept partial payment, re-negotiate the terms of payment, threaten legal actions, etc.;
• Turn your account over to a collection agency;
• Repossess the goods which you are purchasing or other goods in your possession which you pledged as collateral, if the creditor has a "security interest" in the goods; or
• Bring a lawsuit against you seeking the amount owed plus the costs of the suit, usually including attorney fees.

What are my rights if I am contacted by a collection agency attempting to collect a debt?

If you are contacted by collection agencies and/or persons collecting on behalf of the debtor, the federal Fair Debt Collection Practices Act (FDCPA, 15 U.S.C. ' 1692) provides you with several rights. (The FDCPA does not apply to the debtor when collecting on his own behalf.) These rights include:

• Your right to advise the collection agency that the debt is in dispute and request verification of the debt. You must make your request within (30) days of the date you received notice. All requests should be dated and in writing (see sample below). The collection agency must then obtain verification of the debt and provide you with copies of that verification.
• Your right not to be communicated with at any unusual time or place. The law assumes that it is inconvenient to be called before 8:00 a.m. and/or after 9:00 p.m.
• Your right to notify the collection agency that you wish for them to stop all communication with you. The agency may, however notify you as to the status of your account (i.e., that the collection efforts are being terminated or of what action they intend to take).
• Your right to stop all communication with you at your place of employment if your employer prohibits contact from a collection agency at your job.
• Your right to be free from other forms of harassment. For example, a collection agency cannot:
  • Send you postcards or use envelopes which identify it as a collection agency.
  • Send or threaten to send false credit information to others.
  • Talk to or send letters to other people about you or your debt (There are some exceptions).
  • Use obscene or profane language.
  • Use or threaten to use violence against you, your property or reputation.
  • Advertise your debts to anyone.
  • Repeatedly phone you for the purpose of annoying you.
  • Harass your employer.
  • Harass you
  • Make false statements about the debt or use deceptive means to collect the debt or to obtain information about you.
  • Accept or request checks post-dated by more than five days, or deposit or threaten to deposit post-dated checks early.
  • Make false or misleading statements such as:
  • Suggest the collector is:
    • an attorney,
    • operating a consumer agency,
    • working with the government, or
    • someone other than the agency trying to collect the debt.
  • Suggest that papers are formal legal papers if they are not or suggest that papers are not formal legal papers if they are.
  • Suggest you committed a crime.
  • Suggest that non-payment will result in arrest, imprisonment or other action unless the debt collector actually intends to take such action.

MODEL LETTER TO DEBT COLLECTOR

Date

Re:

Dear:

In regard to the above-entitled matter, with this letter I request the following:

• That you cease communication with the exception of notification as to the status of my account; i.e., that the collection efforts are being terminated or of what action you intend to take.
• That you cease all communication with me at my place of employment.
• That you cease third-person communication; that is, communication with anyone other than myself or my attorney.
• I am represented by an attorney. Please direct all future communication to.
• I am disputing all or part of this debt. Please provide me with written verification of the debt. This should include the name and address of the creditor, all contracts, correspondence, billings, notices, etc.

Sincerely,

Consumer (Your Name)

NOTE:

N.R.S. 649.075 requires that all collection agencies must be licensed by the Nevada Commissioner of Financial Institutions. The 2001 Legislature amended N.R.S. Chapter 649 to allow consumers to report unlicensed collection agencies to the Commissioner's office at 702-486-4120 (in Las Vegas). The Commissioner may then stop the agency from conducting business until a license is obtained, seek fines or charge responsible agents with misdemeanors.

Moreover, doing business without a required license is a "Deceptive Trade Practice" under N.R.S. 598.0923. If you are victimized by an unlicensed collection agency, you also have the option of filing a lawsuit for money damages plus attorney fees. N.R.S. 41.600(2)(c). If the collection agency is guilty of fraud you may seek punitive damages in addition to actual damages. N.R.S. 42.005. If your claim for damages is less than $5,000.00 you may file suit in Small Claims Court without an attorney. Clark County Legal Services has a packet entitled "Representing Yourself in Small Claims Court" that is available upon request.

What are my rights if repossession of my property is threatened?

You do not have to consent to the repossession. A creditor can repossess when you are in arrears without a court order, but cannot breach the peace. N.R.S. 104.9503. A creditor may repossess a motor vehicle or any other property (like furniture) which you are buying on installments.

By refusing to consent to the repossession, you force the creditor to sue. This may expose you to additional court costs and attorney fees.You may be able to negotiate a voluntary repossession, whereby the creditor agrees that in exchange for surrender of the vehicle, they will not sue you for more money (a "deficiency". However, the creditor is not obligated to waive the right to sue for a deficiency balance.

Following repossession you have the right to redeem the vehicle by paying the full amount due, plus reasonable repossession costs (i.e. towing and storage charges). N.R.S. 104.9504. For motor vehicles the creditor must give you written notice of your right to redemption and notice of the intent to sell the vehicle within sixty (60) days after repossession.

N.R.S. 482.516. N.R.S. 482.516 sets out specific requirements of a notice of sale of a repossessed vehicle. You may wish to consult with an attorney to determine whether or not the notice you receive meets those requirements and what your rights are in the event it does not. If you do not redeem the vehicle within ten (10) days of receipt of the notice, the creditor may proceed with the sale.

After resale the creditor may attempt to collect from you the "deficiency balance". A "deficiency balance" is the difference between the outstanding debt at the time of resale and what was obtained through the sale. However, in order to collect a deficiency, the sale must be "reasonable". If you did not receive written notice of the sale and/or it does not appear that the sale was reasonable, you should consult an attorney.

Where may I turn for advice?

For expert assistance in deciding the option which is best for you when dealing with debts you may wish to contact the Consumer Credit Counseling Service of Southern Nevada, 3650 So. Decatur, Suite 30, Las Vegas, Nevada 89103, (702) 364-0344. This non-profit organization offers counseling, education, debt management (looking at all of your income, expenses and debts) and specialized counseling (student loans, tax repayment, establishing credit, etc.). The agency will also help you understand the pros and cons of bankruptcy.

What if I am sued?

A creditor can sue you in a court of law for the debt involved and all court costs and attorney fees they incur. If sued, you should receive a written complaint that will either demand that you answer in writing within 20 days of the date of service, or tell you to be in court at a specified time. It is very important that you follow the directions on the summons that will be attached to the complaint. If you do not defend or appear in the lawsuit a creditor can obtain a judgement against you.

If you are sued you may wish to contact a lawyer to see if you may have a "defense" (a legal excuse not to pay). If not, a payment plan may often be arranged or you may be "judgment proof" (do not have any property which can be attached or wages which can be garnished). If you cannot afford an attorney, contact your local legal services program listed below.

Once a judgment is taken a creditor may seek to obtain a garnishment of your wages or an execution on your property. A judgment remains in effect in Nevada for six years. You may be able to protect yourself against garnishment or execution. Obtain the pamphlet " Did You Lose A Lawsuit?" from the legal services program listed below.

CLARK COUNTY LEGAL SERVICES PROGRAM, INC.
800 South Eighth Street
Las Vegas, Nevada 89101
702-386-1070 ext 193
1-800-522-1070
FAX: 702-366-0569
TDD: 702-386-1059 (Hearing Impaired)

The following web sites may provide additional information or assistance regarding consumer law:

American Bankruptcy Institute (ABI) Consumer Information Center
http://www.abiworld.org

Better Business Bureau
http://www.bbb.org/

Consumer Law Page (Alexander Law Firm)
http://consumerlawpage.com/

Fair Debt Collection (FTC)
http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm