The federal Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. §§ 1692 and following) limits how a collector may communicate with you and others about a debt, including whether a collector can call you at work. If you don't pay up and that collector (or a creditor) then files a lawsuit to get a judgment against you, how long that judgment lasts depends on state law.
But collectors and creditors can renew judgments. So, you might be on the hook for a long time. Also, judgment creditors can freeze your bank account and then collect on unpaid debts from those funds.
In this article, you'll learn the answers to the following common questions about debt collection:
Typically, creditors and collectors won't contact you about your debts unless you haven't made payments. But if a debt goes into default, the creditor will either attempt to collect it in-house or hire an outside agency to collect it.
As you might expect, the third parties who attempt to collect debts are called "debt collectors." The federal FDCPA governs debt collectors.
The FDCPA limits how a debt collector may communicate with you and others, including your employer, about your debt. It's not necessarily illegal for a debt collector to call you at work, except in some circumstances.
Debt collectors may use letters and phone calls to communicate with you, subject to some limitations. Collectors may also use texts, email, and other forms of digital communication, like social media, to contact you, including at work. But the FDCPA gives consumers the right to unsubscribe from debt collectors' electronic messages and prohibits communications in some circumstances.
A debt collector can't communicate or attempt to communicate with you by sending a message to an email address that the debt collector knows is a work email address, subject to some exceptions. For example, a collector may send messages to your work email if you used the email address to communicate with the debt collector about the debt and you haven't opted out since. Or if you gave prior consent directly to the debt collector that it could use your work email address and you haven't withdrawn consent, then the collector can email you at that address. (12 C.F.R. § 1006.22(f)(3), 12 C.F.R. § 1006.6(d)).
The FDCPA also describes how collectors may use voicemails and limits how often debt collectors can call you. And you may tell a debt collector to stop contacting you altogether.
The FDCPA prohibits debt collectors from contacting debtors at inconvenient or unusual places. (15 U.S.C. § 1692c). Some workplaces, by their nature, are inconvenient places for debtors to take collection calls. Examples might include schools, hospitals, funeral homes, and restaurants.
The FDCPA also expressly prohibits collectors from contacting debtors at work if the collector knows or has reason to know that the employer prohibits such communications. (15 U.S.C. § 1692c). Many employers have policies that prohibit employees from taking or making nonemergency calls for personal business, which would preclude an employee from taking a collection call.
Because the law prohibits "communications," these restrictions apply to other forms of workplace communications, such as email and texts.
Generally, a debt collector can't contact third parties, such as your employer, about your debt, subject to a few exceptions. For example, the collector can communicate with your lawyer if you have one. Collectors can also contact your spouse, your parents (only if you're a minor), and your codebtors. But they can't make these contacts if you've sent a letter asking them to cease communication. (15 U.S.C. § 1692c).
Also, debt collectors are allowed to contact third parties to find information about your whereabouts. (15 U.S.C. § 1692b).
The collector should know that an employer won't allow collection calls for certain occupations. For example, a collector should have reason to know that an ambulance driver can't take collection calls while on the job. Other times, the collector has dealt with the same employer before and knows that the employer doesn't allow employees to conduct personal business during work hours.
Also, you can notify the collector of your employer's policies. If you call the collector, write down the call's date, time, and what you discussed. Or, send a letter or email and keep a copy for your records. (You don't need to ask the debt collector in writing, but it helps to keep a written record in the event of future problems.)
Despite these restrictions, the debt collector can contact you at work if you consent, or a court order allows such communications. (15 U.S.C. § 1692c).
You can sue the debt collector in state or federal court for violating the FDCPA. The statutory damages are up to $1,000 for each action.
In addition, you might be able to get actual damages, attorneys' fees, and court costs.
The FDCPA doesn't prevent creditors themselves from contacting you directly at work because they're not considered "debt collectors." For example, the FDCPA allows that creditor to call you at work if you're a month late on your car payment.
You might have protection from workplace collection calls from creditors under the Federal Trade Commission Act (FTCA). The FTCA prohibits creditors from engaging in unfair or deceptive acts or practices.
And the Federal Trade Commission (FTC) considers a collection telephone call to your workplace from a creditor who has or should have reason to know that your employer prohibits such a call as an "unfair or deceptive act or practice."
As with a debt collector, you can tell the creditor to stop calling you at work. It's also a good idea to advise that creditor in writing, stating that such calls are forbidden at your workplace. But unlike the FDCPA, the FTCA doesn't give you a right to sue the creditor for violations.
You can, however, file a complaint with the Consumer Financial Protection Bureau.
Your local and state laws might also offer additional protection from workplace collection calls from both debt collectors and creditors. State law might also provide for more significant damages than what federal law allows.
Check with your state attorney general's consumer law department or a local attorney to determine what's legal in your state.
If a collector can't collect payment from you, it might file a lawsuit to get a money judgment against you. A creditor that gets a judgment after filing a suit can then freeze your bank account, usually called a "levy" or "attachment," to collect the debt. (Some creditors, like the Internal Revenue Service and the U.S. Department of Education, can attach your account even without a court judgment.)
But how much the creditor can take from your account might be limited. If all or some of the money came from sources such as Social Security or a public assistance program, this money is protected.
Usually, judgments are valid for several years before they expire or "lapse." In some states, a judgment is effective for around five to seven years. In other states, like New York, it can be 20 years or longer.
Exactly how long a judgment lasts depends on the laws of your state and the method the creditor uses to try and collect on that judgment. The period usually starts running from:
A judgment can potentially become permanent; many states allow creditors to renew their judgments. So, if a creditor gets a court order or files an affidavit or another document, it can renew the judgment for an additional cycle.
In some states, creditors are allowed to renew a judgment once or twice. Others don't have a limit.
If a judgment creditor doesn't renew a judgment on time, that judgment lapses. A judgment might also lapse if the creditor doesn't do anything to execute on that judgment for a certain period.
When a judgment lapses (or becomes "dormant"), the creditor can no longer legally enforce it. So, a creditor can't:
If a judgment against you has lapsed, it might not have gone away forever. Many states allow creditors to "revive" dormant judgments, perhaps subject to a time limit. State laws vary on how the period is calculated. The clock might begin to run from when the creditor last tried to collect on the judgment or from when the judgment later went dormant.
Under the federal FDCPA, a bill collector may still contact you on a lapsed judgment and ask you to pay. But a debt collector can't threaten to garnish your wages or take other legal action to pressure you into settling that old judgment. If a debt collector lies to you about the age of the judgment and whether it lapsed under your state's laws, that also might violate the FDCPA.
Learn what to do if an aggressive bill collector crosses the line.
Find out what you should and should not do when a debt collector calls.
Read about time-barred debts (when the statute of limitations bars creditors from suing for unpaid debts).
Consider talking to a debt relief lawyer if a creditor or debt collector is harassing you. An attorney can tell you more about your rights.
If you have a lot of debts, you might want to consider filing for bankruptcy. In that situation, you'll want to talk to a bankruptcy lawyer.