Legal Restrictions on Debt Collection

People who are awarded money judgments often find that collecting their money is the most difficult part of the process. When debtors don’t pay, it can be a frustrating experience. Yet before you attempt to collect the judgment yourself, you should be aware that the law places restrictions on what you can do in such cases.

Professional collection agencies are usually quite familiar with the law. Individuals who win judgments, however, usually don’t have a legal background. If you are in this situation, you may unknowingly violate the law. This can not only make it harder to collect your judgment, it can make you liable to penalties. In other words, rather than getting the money you are owed, you could end up having to pay the other person or business! To avoid this, it’s important to learn as much about state and federal laws that regulate debt collection.

Most Common Restrictions

The Fair Debt Collection Practices Act (FDCPA) puts certain restrictions on practices that are deemed acceptable when it comes to debt collection. These involve issues such as:

  • How often a debt collector can call someone.
  • The time of day that such calls can be made.
  • Where a debt collector can contact someone (e.g. at home or work).

FDCPA laws are mainly in place to regulate third party debt collectors -i.e. collection agencies and financial institutions. However, regulations may also apply to the original creditor to whom money is owed. In addition, state laws also set certain regulations that limit debt collection practices.

The most common guidelines regarding debt collection have to do with the hours that the debtor may be contacted. Before 8 a.m. or after 9 p.m. are usually considered to be inconvenient hours.

In some cases, a debtor may contact you in writing and tell you to stop calling. He or she may also threaten you with a lawsuit. In such cases, it’s best to seek legal advice to make sure that you stay within legal limits.

Alternatives to Collecting Debt Yourself

Because of the difficulty and legal restrictions associated with collecting debt, it’s often advisable to not take this burden upon yourself if you are having trouble collecting on a judgment. You have two alternatives if you don’t want to get involved in collecting personally.

  • Contact an attorney, preferably one who will only charge you if and when the judgment is collected.
  • Place your judgment on Judgment Marketplace, where you have a chance to sell it quickly and not have to deal with the collection process at all.



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