Editorial Policy

Debt Collectors Can Only Go So Far

Erica Sandberg

November 27, 2012

QDear Erica,

Your article on debt collectors and their calls made me curious. Are there guidelines on when a collector can call (early morning, weekends, nighttime)? How long can a bad debt remain on your credit profile? And can a collector continue to put items on your credit report by continuing to pursue the debt? — Abram

AHi Abram,

Yes, debt collectors are prohibited from calling at certain times of the day. Specifically, they may not contact you, the debtor, before 9 a.m. and after 9 p.m. – and that’s in your time zone, not theirs.

My favorite federal law (doesn’t everyone have one?) is the Fair Debt Collection Practices Act, and I urge everyone who has an account that’s been purchased by a collection agency to become familiar with it. It details what these agencies and their employees may do when trying to get a person to pay.Ask Erica

So just how can collectors behave when trying to reach you to inspire a payment? Well, they may call…

  • Your friend, neighbor or anyone else to try to find you. They can’t discuss your debt with those people, but they can ask where you may be located. The early morning and late evening rule applies here as well.
  • On the weekends. Collectors can reach out to you seven days a week. In fact, they may have a better chance in finding you on a Saturday or Sunday, making the weekends more effective for them.
  • During holidays. It may seem sacrilegious to “bother” you about such a matter as debt on days of worship or legal holidays, but to a collector, it’s business as usual.

Keep in mind, though, that harassment is illegal, and that is typically defined as collectors calling and speaking with you more than once per day if you tell them to stop. Additionally, you can tell them that you no longer wish to be contacted again. In that event, they can do one of two things: give up the chase or inform you that they’ll sue. Therefore, if you legitimately owe the money and it’s within the statute of limitations time frame for your state, be really careful. Telling a collector to stop calling you can prompt a lawsuit.

As for your credit report, certainly a collection account will show up on your files. The negative notation will appear when the account goes delinquent at 30 days. If you still don’t pay up, then expect credit report notifications to appear on your report with each billing cycle (at 60 days, 90 days and so forth). The more time that goes on, the worse the damage will be.

If the creditor charges the account off and sells it to a collector, that information too will wind up on your file. The collection agency may report the unpaid debt to the bureaus for up to seven years from the date of charge-off. After seven years, whether the debt has been satisfied or not, the debt can no longer be reported. If it is, contact the credit reporting bureau and file a dispute.

Never mess around with or try to hide from collectors, Abram. Instead, be upstanding and upfront. If you don’t have a way to pay with your income or assets — and if that’s a situation that will continue long into the future — let your collectors know of your circumstances. You could be judgment proof, meaning that, even if a collection agency does sue you, it would get nothing out of winning the case because you have no assets to seize. The agency may walk away from the entire affair and leave you alone — and if it doesn’t, you can send a cease and desist letter.

Ultimately, if you have the means to pay and you legitimately owe the money, it makes sense to do so. When you do, the calls will stop. You may even be able to negotiate a settlement, where you pay less than the total amount due. Many collection agencies accept them, though generally you’d need to have the entire amount ready to go. Mind, though, that if more than $600 is shaved off, you could be hit with a larger-than-expected tax bill, as that forgiven sum would be considered income by the IRS.

Got a question for Erica? Send her an email.