Debt Collection Laws

The worst part of being in debt is that at some point or another, you simply have to face the music, or in this case, your creditors. While there are several options available to you for getting out of debt, including a number of debt consolidation programs ( Debt Consolidation ), it is important to know your legal rights as a consumer vis-à-vis your creditors.

 

Fair Debt Collection Practices Act

Enacted in 1996 to protect consumers from all forms of debt collection, the Fair Debt Collection Practices Act was passed in reaction to the large number of Americans who had undergone bankruptcies, marital instability, divorce, the loss of jobs, and invasions of individual privacy as a result of overzealous debt collection agencies. As a result of the rampant use of abusive, deceptive and other forms of unfair debt collection practices employed by many debt collectors, the federal government stepped in. The main objective of the US Fair Debt Collection Practices Act is to:

• Put an end to abusive debt collection practices by debt collectors.
  
  
• Ensure that those debt collectors who do refrain from using abusive debt collection practices are not put at a disadvantage with regards to their competitors who continue to engage in such practices.
  
  
• Promote consistent State action to protect consumers against debt collection abuses.
  
  

For the complete text of the Fair Debt Collection Practices Act, visit the Federal Trade Commission.

Canadian Debt Collection Laws

Enacted in the same spirit as the Fair Debt Collection Practices Act, Canadian debt collection laws stipulate that creditors may not engage in any form of abusive practices such as calling the debtor at unreasonable hours at home or at work, presenting any sort of threat, promise or charge not pertaining to the debt, calling the debtor's employer without his or her permission (except to verify that he or she is employed), or communicating with anyone in the debtor's family or workplace in a way that may cause distress, alarm or humiliation.

For further information, see The Office of Consumer Affairs Canada.