Debt Collection Laws: How You Can Protect Yourself Against Debt Collectors

Editor's note: This post was originally published February 6, 2024, and has been updated for accuracy, comprehensiveness and freshness on January 21, 2025.

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Did you know that, according to the Federal Reserve Bank Philadelphia, “All measures of balance-based credit card delinquency rates posted their highest levels in the nearly 12-year history of the series in the first quarter [of 2024]”? That means that more people are behind on their credit card payments, leading to deeper debt and worse financial troubles regardless of age, job status, or family situation.

You may be doing your best to keep up with debt repayment, but sometimes, you can accidentally overlook certain debts. Debt collectors will start contacting you to ask you to pay those overdue debts. When you are stressed about debt, you can suffer financially, mentally, and physically.

We’ve asked one of our trusted LegalShield provider lawyers, Ben Farrow of Anderson, Williams, & Farrow, LLC, for his insight on debt collection. He’s given us the info needed to deal with debt collectors, start climbing out of debt, and how to proactively defend against debt in the first place.

What are debt collection laws?

Debt collection laws exist to protect you from third-party collectors taking advantage of you. Whether you are a young adult or a senior citizen, these laws apply to you. Knowing what debt collectors can and cannot legally do will empower you to respond appropriately when you receive those phone calls or letters:

1. Debt collectors can attempt to collect debts that have exceeded the statute of limitations in most states, but they may not sue, threaten to sue, or threaten other legal action. However, if you make a payment or you acknowledge that you owe the debt, the time period may restart.
2. If you have a time-barred debt, you may have a defense if they sue you for that debt.
3. If a debt collector attempts to collect debts that were owed by a deceased spouse or loved one, you may have a defense. Keep in mind though, if you co-signed with your now deceased family member, or if you agreed in writing to be responsible for payment of that debt, you may be subject to paying that debt.
4. The Fair Debt Collection Practices Act (FDCPA) is the main statute in place to protect you.

Ben Farrow weighs in on this:

“The biggest protection of the FDCPA is the requirement that a notice for validation of debts be sent to the debtor before any collection activity can take place. The second biggest protection is the requirement that, if requested, the supporting documents and validation of the debt must be sent to the debtor.”

Ben does warn you to remember that “The FDCPA only applies to the third-party bill collector. That means that the original creditor can still be aggressive in collecting its debt.”

Is there debt forgiveness for senior citizens?

There may not be specific debt collection laws or debt forgiveness options for seniors. However, there are senior-specific options outside of debt collection and forgiveness, which can help seniors pay off debts. For example, seniors can consider a reverse mortgage, relinquishing equity in their home in exchange for regular payments. To qualify for a reverse mortgage, a senior needs to be 62 or older, be able to afford monthly payments on their house, and have decent amount of equity in the home.

Ben points out, “Senior citizens are equally protected by the FDCPA as any other debtor. So, just like any other debtor, a bill collector may not use profanity, threaten violence or arrest, refuse to identify themselves, repeatedly call, insist that the debtor owes more than they do, or impersonate an attorney or police officer.” This is good news, since some elders aren’t as up to date or know how to research the accuracy of claims.  

Can debt collectors garnish Social Security?

“Generally, Social Security benefits are exempt from garnishment, but there are some exceptions,” says Ben. “The most common exceptions are garnishment for delinquent federal taxes, child support payments, or other debts owed to Uncle Sam (food stamps, housing assistance, student loans).”

If you are subject to garnishment, Ben notes, “The Consumer Credit Protection Act (CCPA) helps to protect you by limiting a garnishment.” The Department of Labor has a fact sheet to help you understand the wage garnishment protections that the CCPA provides for you. Check it out if you are concerned about your debt situation!

What credit forgiveness exists for consumers?

Whether you are a student over your head with student loans, or you are a senior who keeps receiving aggravating collections calls, there are still ways for you to help yourself. Ben Farrow shares, “If someone finds themselves in collections, the best thing they can do is contact the bill collector to verify the debt is properly owed and that the creditor has proof of the debt. Next, they can find out what kind of ‘deal’ can be worked out. Typically, a collector will either take a payment plan or a reduced lump sum payable within 30 to 60 days of the promise to pay.”

Debt collectors calling? Protection under the law for consumers dealing with third-party debt collectors

According to the FDCPA, debt collectors may not do the following:

• Make threats to physically harm you or your loved ones.
• Use inappropriate or obscene language to scare you into submission.
• Call you before 8 a.m. or after 9 p.m. without your express permission.
• Call you at work if they know that your employer prohibits you from receiving such communications.
• Make repeated phone calls in a row with intent to annoy, abuse, or harass you.

Knowing what a debt collector can and cannot do empowers you to take action if a collector does something illegal. A cease and desist letter bearing a law firm’s official letterhead would be a strong method for you to put a stop to illegal activity by a debt collection agency.

Your essential debt protection checklist

Ben Farrow gave us some handy tips to help you avoid falling prey to debt collectors:

• Live within your means.
• Don’t use your credit too aggressively.
• Monitor your credit and debit accounts for unauthorized activity.
• Check your monthly statement.
• Check your credit report.
• Report suspicious activity to the bank, credit card company or other lender.

Debt is a scary thing to deal with alone, especially if you don’t know all the legal requirements and rules. That’s why LegalShield is here to help. When you become a LegalShield Member, our personal and family legal plans give you access to a provider law firm.

Our experienced provider lawyers, just like Ben Farrow, protect and empower members with personal consultation, advice, document review starting at up to 15 pages each, a phone call or letter if determined necessary, and other services concerning your debt repayment process.

Your LegalShield Membership includes having a Will prepared  as part of the membership. Gain peace of mind as you navigate debt collection today with a LegalShield Membership!