The Fair Debt Collection Practices Act (FDCPA) protects consumers from abusive practices by debt collectors. These include harassing phone calls—something that bankruptcy lawyers often hear about from their clients. However, the FDCPA doesn’t cover every entity that is owed a debt, only third-party collectors. This means that original lenders are not bound by this law’s restrictions. Take the fictional example of Anna, who couldn’t pay her medical bill. The hospital who issued the original bill is not required to abide by the restrictions of the FDCPA. However, let’s assume the hospital sold the debt to a debt collection agency. This third-party debt collector is bound by the law’s restrictions.
There is one exception to this rule. If the original lender uses a different name when carrying out debt collection procedures, then it’s treated as a third party under the FDCPA’s provisions.
If you’ve been receiving letters and phone calls from debt collectors because you’re having trouble making ends meet, it’s time to consider whether bankruptcy might be the right solution for you. Call (847) 961-4572 to speak with an experienced bankruptcy attorney at Cutler & Associates, Ltd. in Aurora.