More from the last two weeks on what a debt collector cannot do. This is based on the federal Fair Debt Collection Practices Act (FDCPA) and the California Rosenthal Act (also called the Rosenthal FDCPA). You may have seen these tactics from debt collectors. Debt collectors, such as Persolve, Midland Funding, and CACH are some of the large ones who should know better, but do not always know better.
Can a debt collector garnish my bank account or my wages?
If you do not pay a debt, a creditor or a debt collector generally can sue you to collect. If they win the lawsuit, the court will enter a judgment against you. The judgment states the amount of money you owe, and allows the plaintiff (the creditor or the debt collector) to have a writ issued, either to garnish your wages or take money out of your bank accounts (called a levy).
Wage garnishment happens when your employer withholds part of your compensation to pay your debts. Your wages usually can be garnished only as the result of a court order. A bank levy is when the bank takes money out of your account and gives it to the creditor.
Can federal benefits be garnished?
Many federal benefits are exempt from garnishment, including:
- Social Security Benefits
- Supplemental Security Income (SSI) Benefits
- Veterans’ Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Military Annuities and Survivors’ Benefits
- Federal Emergency Management Agency Federal Disaster Assistance
Federal benefits may be garnished under certain circumstances, but typically not for a debt collection lawsuit. If you receive federal benefits, you should keep those in a separate account from any other accounts that you have.
Do I have any recourse if I think a debt collector has violated the law?
You have the right to sue a collector in a state or federal court within one year from the date the Fair Debt Collection Practices Act (or California’s Rosenthal Act) was violated. If you win, the judge can require the collector to pay you for any damages you can prove you suffered because of the illegal collection practices, like lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can not prove that you suffered actual damages. You also can be reimbursed for your attorney’s fees and court costs. Even if a debt collector violates the FDCPA in trying to collect a debt, the debt does not go away if you owe it. If you talk to an attorney, you should ask if the attorney negotiates the debt as well as handles the FDCPA violations or if the attorney just handles the debt collection violations.
What should I do if a debt collector sues me?
If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or hire a lawyer to do it for you, by the date specified in the court papers to preserve your rights. At the very least, talk to an attorney about your rights.
Where do I report a debt collector for an alleged violation?
Report any problems you have with a debt collector to the Federal Trade Commission, and the Consumer Financial Protection Bureau. Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law, which, in California, is the Rosenthal Fair Debt Collection Practices Act.
I will be posting more questions and answers over the coming weeks. Remember, if you are contacted by a debt collector, ALWAYS talk to an attorney about your options before you do anything else.