The Fair Debt Collection Practices Act (FDCPA)

Added in 1978 to help ensure collection practices are fair and not abusive toward the consumer. Guidelines were developed on proper and improper tactics when collecting debt such as the proper times of contact or the improper adding of collection fees. Parameters of this act also include the consumer’s right to notify collection agencies within 30 days of receiving a collection notice that the debt the agency is attempting to collect on is fraudulent. The collection agency must investigate and verify the debt is accurate before they move forward in the debt collection process. For full text of the act, Click Here.

Bankruptcy

Chapter 7: The court would discharge most of the debts, however, it is possible, depending on the debtor’s state, that assets and property would be subject to liquidation. Bankruptcy is reported on your credit report for 7 to 10 years. Chapter 11: Generally for business entities, the debtor maintains control of the business unless the court appoints a trustee). Chapter 13: The court would structure a repayment plan by appointing a trustee to disburse the excess income provided by the debtor to satisfy their debts. For more information on Bankruptcy, Click Here.

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