Things Pennsylvanians dealing with a debt collector should know

If you live in the U.S., then you’re statistically likely to have debt.

According to Pew Charitable Trusts, eight out of every 10 Americans hold some form of debt. In Pennsylvania, the average person has more than $80,000 in outstanding debt. In Philadelphia, where more than 20,000 debt collection lawsuits are filed in municipal court each year, low- and middle-income Black and Hispanic households are more likely to be impacted, according to research by Community Legal Services of Philadelphia (CLS) and by The Pew Charitable Trusts.

Debt can look like many things from owing rent to landlords or needing to pay credit card bills, to taking out a loan for a home or education (the two largest sources of debt in the U.S.). If there’s ever a time when someone can’t make a debt repayment or a debt isn’t paid back within a given period, the person who lent the money may decide to collect on that debt.

Here’s what you should do if that happens and how to get help if someone engages in unlawful debt collection practices.

Debt collectors come in many forms. They can be the creditor themselves, the creditor’s lawyers or third-party debt collection companies. According to CLS senior staff attorney in consumer rights, Kerry Smith, these debt collection companies can also be “debt buyers,” firms that buy debt for pennies on the dollar from a creditor that has deemed it uncollectible. According to Smith, debt buyers make up half of all debt lawsuits filed in municipal court each year.

Debt collectors can contact you to request you pay back the debt you owe. However, there are rules around it. In general, debt collectors are allowed to show up at your home, call or text you and send you mail to your home address or email address at reasonable hours of the daytime.

There are federal protections under the Fair Debt Collection Practices Act and state protections under the Fair Credit Extension Uniformity Act which both regulate how debt collectors can do business and provide protections to debtors against unfair debt collection practices.

Here are the protections under these laws.

Debt collectors are allowed to contact you, but there are rules — unless a debt collector gets your prior consent or permission from a court to bypass the rules.

Debt collectors generally can’t communicate with you:

Debt collectors are only allowed to communicate with third parties — like an employer, non-relative or legal professional who knows of a debtor’s whereabouts — for the purpose of getting location or contact information about a debtor. During communications, at no point is a debt collector allowed to reveal that a debtor owes money.

Debt collectors are not allowed to use abusive practices to try and collect a debt from a debtor. This covers a wide range of activities:

Debt collectors also can’t use tactics that could deceive you into paying more than you owe or embarrassing you in public.

Debt collectors are not allowed to:

Debt collectors are not allowed to lie, mislead or make false statements to debtors, including:

Yes. You can tell a debt collector to stop calling, texting, sending mail and showing up at your door (or all of these). You don’t have to engage with debt collectors and you can request them to completely stop contacting you, and they must comply.

If they don’t comply, you can report debt collectors to enforcement agencies, the federal Consumer Financial Protection Bureau and Pennsylvania’s Office of Attorney General (more on that below).

While requesting a debt collector to stop contacting you will potentially get them off your back in the short term, they can still file a lawsuit against you, and collectors will report debt information to credit agencies (they have to tell you before they do), so unpaid debt will lower your credit score. However, information on a credit score only stays on the report for seven years.

Keep in mind, according to the Consumer Financial Protection Bureau, ignoring a debt collector is unlikely to make them stop contacting you.

Report unfair debt collection practices to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint. This agency has guides on all stages of debt collection, from when first contacted, to negotiating agreements with debt collectors and if a debt collector sues you. All these guides can be found online at consumerfinance.gov/consumer-tools/debt-collection.

Report unfair debt collection practices to Pennsylvania’s Office of Attorney General at attorneygeneral.gov/submit-a-complaint. You can also call toll-free at 1-800-441-2555. The OAG’s office can provide guidance and resources, but the Attorney General also sues debt collectors for unfair practices.

If sued, report unfair debt collection practices to Community Legal Services to receive guidance and possible legal representation if you have low income. Otherwise, try the Phily BAR Association at philadelphiabar.org.

Contact CLS:

Need financial counseling? The city offers free one-on-one counseling through Financial Empowerment Centers located throughout the city. To receive help, call 855-346-7445.