If an overdue credit card balance remains unpaid for long enough, the creditor usually changes the bookkeeping status of the account. Instead of simply being past-due, the credit card balance is declared a business loss. Even though collection calls from the creditor are likely to cease at that point, calls from a new debt collector may ensue after the account is charged off and sold.

Unlike the original creditor, a subsequent debt collector is subject to additional restrictions on the manner in which collection activity is conducted. Individuals with a charged-off credit card balance can use the Fair Debt Collection Practices Act as a guide to ensure that a collector operates within acceptable legal bounds. Known as the FDCPA, the Fair Debt Collection Practices Act generally does not apply to the original creditor.

Initial contact

A major intent of the FDCPA is to curb abusive practices by debt collectors. If a debt collector contacts you by phone, the collector must also mail or deliver a written notice to you within five days of the initial phone contact. The written notice must provide you with the opportunity to ask for verification of the debt. If you request verification within 30 days of the initial letter, the calls must stop until the debt is verified.

Ongoing restrictions

If the collector provides you with written verification of the debt, the calls may resume. The FDCPA places restrictions on the hours that a debt collector can call, as well as restrictions on the personal conduct of the collector. You may request either orally or in writing that a debt collector not contact you at your place of employment. If necessary, you can stop all contact entirely.

Stopping all contact

The FDCPA allows you to send a certified letter to the debt collector and request an end to all letters and phone calls. An exception to the rule at this point is that the debt collector may notify you of an impending lawsuit. An outstanding debt still exists, so stopping all contact may not be a practical solution unless the information about the debt is incorrect or the collector is abusive.

As in many other legal matters, there are various statutes of limitations on the collection of debt. In most states, the statute of limitations on credit card debt ranges from three to six years. The statute of limitations is as many as 10 years in some states. Contact a financial guidance center for more information.   

Share