As a consumer, it is important to understand your rights and responsibilities. This is particularly true if you fall behind on debt payments.

The Fair Debt Collection Practices Act (FDCPA) outlines some hard and fast rules that apply no matter where you live in the U.S. For example, the FDCPA states that a collector may contact you only between 8 a.m. and 9 p.m. Collectors are also forbidden from lying or engaging in unfair practices, such as communicating with you by postcard.

In addition to the Federal laws, each state sets laws as to what, and how, a creditor can collect on a delinquent account. Some states permit a creditor to garnish a debtor’s wages; others don’t (like Texas). Some states exempt just about all assets a debtor has from seizure by a creditor to satisfy the payment of a debt. Other states can force you to sell some of your assets to satisfy a judgment.

While I don’t recommend packing your bags and moving to Texas to avoid potential wage garnishment, I do recommend knowing what is and is not possible in your state of residence. Unfortunately, learning about your state collection laws is not as easy as it sounds. There are a few law firm Web sites that offer a breakdown of state laws; however, most have disclaimers stating that the information may not be accurate or complete. Laws change constantly making it hard for anyone to maintain a list that is up-to-date.

The Federal Reserve has the role of protecting consumers (though Congress is currently considering the creation of a new Consumer Financial Protection Agency) and their Consumer Help Web site contains some good general information about consumer issues. For more specific information about your state laws, you can research state statutes related to debt collection or you can contact your local consumer protection office. A list of state and county consumer protection offices can be found on the Federal Citizen Information Center’s Web site.

For more on this topic, also see:

Consumers ask about debt collection & their rights
Dealing with someone else’s collection calls
How to resolve three common consumer complaints

My turn for a disclaimer: I am not an attorney. For legal advice, it is always best to seek legal counsel.

In a recent Ask Amy column, “Frustrated” wrote for advice on how to deal with collection calls she and her husband were receiving on behalf of her brother-in-law.  Amy suggested that “Frustrated” do some more research because her husband may have been a cosigner on the loan.  While that certainly is a possibility, it is not the most likely. 

In a subsequent column, “Patti” wrote in to disagree with the previously given advice. She wrote:

Dear Amy: I’m responding to “Frustrated,” who is getting collection agency calls for her brother-in-law.

You suggested that her husband may have co-signed for a loan and that she should call the agency “to get to the bottom of their household’s entanglement” with the brother-in-law’s finances.

Allow me to disagree. Collection agencies find as many avenues as possible to collect their money.

I used to get calls for my stepsister’s ex-husband, and she and I never even had the same last name!

I suggest ignoring the calls.  — Patti

Apparently, “Patti” wasn’t the only one who wrote in about the issue.  Since we are all voicing our opinions, I’d like to take a turn and suggest a course of action other than ignoring the calls. 

“Frustrated” said that she and her husband “received a message on our answering machine from a collection agency asking for my brother-in-law to be responsible and pay his bills.”  If this is the case (and assuming that “Frustrated’s” husband did not cosign for a loan), it appears as though the collector violated the Fair Debt Collection Practices Act (FDCPA).  Section 804 of the FDCPA stats that “Any debt collector communicating with any person other than the consumer for the purpose of acquiring location infor­mation about the consumer shall not state that such consumer owes any debt.”

My advice to “Frustrated” is that she report the collection agency’s actions to the Federal Trade Commission (FTC).  While the FTC does not resolve individual consumer complaints, they do work to detect patterns of wrong-doing, and lead to investigations and prosecutions. The FTC also enters all complaints it receives into Consumer Sentinel, a secure online database that is used by thousands of civil and criminal law enforcement authorities worldwide.  The FTC receives more complaints about the debt collection industry than any other specific industry.  In 2007, the FTC received 70,951 FDCPA complaints. 

To stop future calls from this collector, “Frustrated” can simply pick up the phone one time and explain that she understands her rights under the FDCPA.  The FDCPA also states that “Any debt collector communicating with any person other than the consumer for the purpose of acquiring location infor­mation about the consumer shall not communicate with any such person more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information.” 

BTW, on a more personal note, I think Amy’s advice to “Frustrated” that she “tackle this issue now” was spot on.  Maybe “Frustrated” can positively influence and mentor both her brother-in-law and father-in-law.  That being said, I should probably mention that I am not an attorney or a family therapist!