Philadelphia Debt Clinic

To paraphrase Franklin Roosevelt, the only thing you have to fear is fear itself.

• Collection agencies use fear to manipulate people into paying debts they cannot afford.  People receive letters and calls from a collection agency and become fearful that something bad will happen to them if they do not pay. 

• Collection agencies are prohibited from making false representations to debtors, but there are rogue collection agencies that routinely use lies to scare debtors into making payments.     

• A common scare tactic is to represent that the sheriff is on his way to serve legal papers, and you need to pay to stop him.  This representation is usually always a lie because attorneys do not announce ahead of time that they are serving legal papers because they do not want the person being served to try to evade service.

•  Another scare tactic is to threaten arrest or criminal prosecution.  Nonpayment of a debt due to lack of income is not a crime, and this sort of threat is always false.  The one exception might be for passing a bad check.  Passing a bad check can have criminal penalties, but this is the only type of debt for which a threat of criminal prosecution might be legitimate.

• Debt collectors who represent payday lenders are among the worst offenders, which is not surprising since payday lending is a form of loan sharking.  If you reside in Pennsylvania, and receive a call from someone trying to collect a payday loan you received on-line, be aware that the interest rate on the loan is likely illegal, and the debt you are alleged to owe is uncollectible.  This type of debt collector may make outlandish threats, but do not be scared.  On-line payday lending is illegal in Pennsylvania, so the lender cannot sue to collect.

• The reality is that if the collection agency is not a law firm or is located out of state, there is probably little the debt collector can do to cause immediate harm to you.

• A debt collector can only do harm by suing you.  A lawsuit can lead to a judgment, which is a judicial determination that you are liable to pay a debt, and a creditor can use a judgment to take your property by judicial process usually with the involvement or assistance of the local sheriff's office.   

• If the debt collector that is harassing you is not a law firm then you probably do not have to worry about being sued by them.  Even if the debt collector is a law firm, you probably do not have to be too worried about being sued if the debt collector is located far away, out of state.  The debt collector usually has to be local to sue you.

• If the debt collector that is pursuing you is a local law firm, then greater concern might be warranted because that law firm is in a position to sue you.   

What should you do when the debt collector calls?

• If you can't pay the debt, the best thing to do might be nothing.  The best thing might be not to talk to the debt collector because nothing constructive will result from the conversation if you are not able to pay.   

• Test whether or not the debt collector is legitimate by asking them for a physical street address at which they can be reached by mail, such as for the payment of money by check.  If the debt collector will not provide you with a verifiable physical street address it is likely because the debt collector is acting improperly and does not want to be sued.  This is particularly true for the rogue debt collectors who collect for the payday lending industry.
  

• Debt collector are supposed to stop calling you, if you write them a letter informing them that you do not have the money to pay the debt.  If you write such a letter, send it by certified mail and keep a copy of the letter and the proof of mailing.
• Debt collectors are supposed to stop calling you if you are represented by an attorney or if you file bankruptcy.  

FAIR DEBT COLLECTIONS PRACTICES ACT

• Forbids debt collectors from engaging in fraudulent or  deceptive conduct.
• Forbids debt collectors from harassing you or threatening legal action they do not intend to take.
  
• It is not a crime to fall behind on a debt due to lack of income, so it is generally prohibited for debt collectors to threaten arrest or criminal prosecution. 
  
• Calling at inconvenient times and places is also prohibited.  If you inform a debt collector that you are not allowed to take their calls at work, they are supposed to stop calling you there.
• A debt collector is supposed to stop calling, if you send a letter telling the debt collector to stop. PDC has form letters you can use for this purpose.

If you're concerned about what a debt collector has said or done to you, feel free to call me to discuss your situation.  I might be able to file a lawsuit for you against the debt collector.