What Debt Collectors Are Allowed To Do
Understanding the legal boundaries of debt collection
Under the Fair Debt Collection Practices Act (FDCPA), debt collectors have specific rights to collect legitimate debts. However, these rights are balanced with strict limitations to protect consumers from abuse. Knowing what collectors can legally do helps you distinguish lawful collection from harassment.
✓ What Debt Collectors CAN Do
Contact You
Collectors can call, email, or send letters to request payment.
Conditions:
- Only between 8 AM and 9 PM in your time zone
- Must stop if you request communication only by mail
- Must stop entirely if you send a cease and desist letter
Contact Third Parties (Limited)
Collectors may contact others to locate you.
Conditions:
- Only to obtain location information
- Cannot contact same person more than once
- Cannot reveal they are debt collectors
- Cannot discuss your debt with them
Sue You
Collectors can file a lawsuit to collect the debt.
Conditions:
- Only if statute of limitations hasn't expired
- Must be filed in proper jurisdiction (usually where you live)
- Must serve you properly with lawsuit documents
- Must prove you owe the debt in court
Report to Credit Bureaus
Collectors can report unpaid debts to credit reporting agencies.
Conditions:
- Must be accurate information
- Cannot report debts older than 7 years
- Must mark as "disputed" if you dispute it
- Must stop reporting if they can't validate
Garnish Wages (After Judgment)
After winning a lawsuit, collectors can garnish wages.
Conditions:
- Must obtain court judgment first
- Limited to 25% of disposable income (federal limit)
- Some income types are exempt (Social Security, etc.)
- Must follow state-specific garnishment laws
Place Liens (After Judgment)
Collectors may place liens on property after court judgment.
Conditions:
- Requires court judgment
- Must follow state lien procedures
- Homestead exemptions may apply
- Cannot force immediate sale of primary residence
Negotiate Settlements
Collectors can offer to settle debt for less than owed.
Conditions:
- Settlement offers must be genuine
- Terms must be clearly stated
- Should provide written agreement
- You're not obligated to accept any offer
Request Payment
Collectors can ask you to pay the debt you owe.
Conditions:
- Must provide validation notice
- Must provide verification if requested
- Cannot misrepresent amount owed
- Must accurately apply payments
Accept Partial Payments
Collectors can accept payments less than the full amount.
Conditions:
- Not required to accept partial payments
- Can still pursue remaining balance
- Payment may restart statute of limitations
- Should apply payment to principal first
Important Limitations on Collection Activities
Contact Hours
Can only call between 8 AM - 9 PM in your time zone, not theirs.
Frequency
While not specified, excessive calls may constitute harassment under FDCPA.
Workplace Contact
Must stop contacting you at work if you tell them your employer prohibits it.
Written Request
If you request written communication only, they must honor it.
Privacy
Cannot discuss your debt with anyone except you, your spouse, or your attorney.
Validation Period
Must pause collection efforts while investigating your validation request.
The Lawsuit Process: What to Expect
Lawsuit Filed
Collector files complaint with court and serves you with legal documents.
You Must Respond
You typically have 20-30 days to file an answer or risk default judgment.
Discovery Phase
Both sides exchange evidence and documentation.
Court Hearing
Case goes to trial or hearing where judge makes decision.
Judgment
If collector wins, court issues judgment for amount owed plus costs.
Collection Actions
Collector can now garnish wages, freeze accounts, or place liens.
⚠️ Never Ignore a Lawsuit
Ignoring a lawsuit guarantees you'll lose. Always respond, even if you think the debt is invalid. Consider consulting with an attorney.
State-Specific Variations
While the FDCPA is federal law, states may have additional protections:
Stronger State Laws
Some states have stricter rules than FDCPA. When state and federal law differ, the law providing more consumer protection applies.
Licensing Requirements
Many states require debt collectors to be licensed. Unlicensed collectors cannot legally collect in those states.
Garnishment Limits
States may have lower garnishment limits or protect more income than federal law requires.
Exemptions
State laws determine which assets are exempt from collection (homestead, vehicle, personal property).
How to Respond to Legal Collection Actions
Key Takeaways
Collectors have legal rights to collect legitimate debts through lawful means
These rights are limited by FDCPA and state laws to prevent abuse
Collectors must obtain court judgment before garnishment or liens
You always have the right to validate debts and dispute inaccuracies
Never ignore a lawsuit, even if you believe the debt is invalid
State laws may provide additional consumer protections
Know the Rules, Protect Your Rights
Understanding what collectors can legally do helps you distinguish legitimate collection from harassment and respond appropriately.