Debt Collection LEGAL SERVICES. Know Your Rights. - What you can do. - What bill collectors can (and cannot) do. Consumer Law Project for Elders

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1 Are you 60 or over? If yes, free legal assistance is available. If you have a debt collection or other consumer problem, please call CONSUMER LEGAL SERVICES SELF HELP SERIES Consumer Law Project for Elders Call SLS for help if you are under 60. Search our website for help. Statewide Legal Services Debt Collection Know Your Rights - What you can do - What bill collectors can (and cannot) do January 2014 We offer free legal help in many areas including: welfare SNAP (food stamps) divorce child support domestic violence bankruptcy special education nursing home care health insurance eviction foreclosure...and more See reverse side for more about Legal Services.

2 Introduction If you are behind in paying your bills, someone will probably contact you to collect the money you owe. You might owe money on a car loan, credit card accounts, medical bills, utility bills, home mortgage and others. I've been contacted about a debt... what do I need to know? You may be contacted by either a creditor directly or by a collection agency. Creditor Collection Agency A company you owe money to (example: a credit card company) A separate company that is in the business of collecting debts Past Due Both are also called debt collectors Your rights can be different depending on whether you owe money to a creditor or to a collection agency. Creditors and collection agencies are also called debt collectors. Debt collectors will try to collect money from you even if you do not have the money or you think that you do not owe anything. This booklet explains your rights about debt collection and What you need to know if a debt collector contacts you What bills you should pay first What you can do if you don't think you owe the debt What you can do if you cannot afford to pay the debt What debt collectors can and cannot do What happens if you are sued by the debt collector. If you're under 60, call us for help. Search our website for help Connecticut Legal Services Bridgeport 211 State Street New Britain 16 Main Street New London 153 Williams Street Stamford 20 Summer Street Waterbury 85 Central Avenue Willimantic 872 Main Street Greater Hartford Legal Aid Asylum Avenue Hartford, CT Statewide Legal Services or If over 60, call CLPE New Haven Legal Assistance Association State Street New Haven, CT Consumer Law Project for Elders Free legal assistance to seniors 60 and over throughout CT who have consumer problems Legal Assistance Resource Center of CT (LARCC) Community education and public policy advocacy organization addressing issues of importance to low-income Connecticut residents. 363 Main Street, Flr. 3-1 Hartford, CT This booklet was produced by the Legal Assistance Resource Center of Connecticut in cooperation with Connecticut Legal Services, Greater Hartford Legal Aid, New Haven Legal Assistance Association, and Statewide Legal Services. The information in this booklet is based on laws in Connecticut as of 1/2014. We hope that the information is helpful. It is not intended as legal advice. For advice on your situation, call Statewide Legal Services or contact a lawyer. 2 Call SLS for help or January 2014

3 Repossession A creditor can t come into your house without your permission to repossess personal property such as furniture or appliances. If someone tries to break into your house or garage, call the police. If you leave your car parked in front of your house or in your driveway where the creditor can find it, the car can be repossessed easily. If a creditor threatens to repossess personal property, it is probably a good idea to talk to a lawyer. It s easier to prevent a repossession than to get your property back after it has been repossessed. Repossession Calendar Day of repossession-creditor takes back the item(s) Within 3 days after repossession-creditor must give you a written statement of the amount you owe and the costs of repossession and storage. You might get this written notice BEFORE the repossession. 1 to 15 days after repossession- If you did not receive written notice before the repossession, you can get your item back by paying the amount you owe and cost of repossession and storage. If you did receive written notice before the repossession, you may be able to get your item back by working out an agreement with the creditor which may require refi nancing or paying off the full debt. Before the creditor sells your item-creditor must give you at least 10 days' written notice of the time and place of any public sale or the date after which they can sell it in a private sale. You can get your item back up to the date of resale if you work out an agreement with the creditor. Day of Resale- Creditor sells the item. 1 to 30 days after resale-creditor gives you a written statement of how much the item sold for and how the money from the sale was spent. What bills should I pay first? If you cannot pay all your bills, you must decide which bills to pay. Think about what will happen if certain debts are not paid. Ask yourself, What will affect my family the most? You might want to pay in this order: 1. Your family s health. Food, medication, health insurance, and more. 2. Your family s housing. Rent, mortgage, condo fees, real estate taxes, utilities (heat and electricity). 3. Your family s other bills. Car payments if the car is essential (for example you need a car to get to work), Child support, Income taxes, and Government insured student loans. If you have money left over after paying these bills, you can decide how much money you can pay each of your other debt collectors. Budgeting You might want to learn how to budget your debts. Call or visit: The University of Connecticut Cooperative Extension System 305 Skiff Street North Haven, CT Bill Due 14 Call SLS for help or Search our website for help 3

4 I do not think I owe the debt. What can I do? You should not be billed for something you did not buy or that you already paid for. But, sometimes mistakes are made. Here is what you can do If a CREDITOR says you owe Letter B To fi le a complaint because the creditor or collection agency broke the law Your street address Today s date You have the right to dispute (disagree with) the charge. To dispute it q Look at the back of your monthly statement for instructions on how to fi le a dispute. It is best to put your dispute in writing. q You can use Letter A in the back of this booklet. q Include a copy of your monthly statement and circle the item you are disputing. If a COLLECTION AGENCY says you owe q You should immediately write a letter to the collection agency saying you don't owe the debt. q You can use Letter A in the back of this booklet. Until they send you the proof, they must stop contacting you. What can happen next? If they send proof, but you believe it is wrong, you should q Send them another letter along with proof that you paid or that the debt is not yours. q If they continue to try to collect from you, call us at OR if you're over 60 or call a private lawyer. If they do not send proof, you do not need to do anything. They must stop contacting you. Name of consumer agency Street address Re: Collection Practices of : To Whom It May Concern: Name of company Street address I would like to file a formal complaint against (company) for actions taken while trying to collect a debt. My complaint is as follows: (State your complaint) I would appreciate it if you would investigate this matter and have these practices stopped. I may be contacted at the above address if additional information is needed or you may call me between and at telephone. Sincerely, (hours when you can be reached) Sign Your Name Print Your Name 4 Call SLS for help or Search our website for help 13

5 Letter A To tell the creditor or collection agency you owe a different amount or why you have not paid Name of creditor or collection agency Street address Your street address Today s date Re: Billing Error Notice - Account Number: (number shown on your bill) Dear Sir or Madam: I have received your bill dated regarding an overdue bill for (the item you were billed for) q I have paid this bill in full q I have paid part of this bill and I owe. (amount) q I have not paid this bill because. (reason) Please check your records and correct my account. In addition, please do not send me any more bills or call me until this matter is settled. Sincerely, Sign Your Name Print Your Name What if I owe the debt, but I cannot afford to pay it? Debt collectors will try to pressure you into agreeing to pay more than you can afford. If you cannot afford to pay the full amount, send the amount you can afford every month even if they say it is not enough. If you pay something each month, it may stop them from suing you for the full amount of the debt. If you cannot afford to pay anything and you want them to stop contacting you, you can write a letter (see below). Can they call me to ask for their money? Yes, but there are limits on what they can do. They are trained to pressure you until you agree to pay something. You do not need to listen to their demands -- just hang up. Can they send me letters demanding payment? Yes, but you have the right to send a letter telling them not to contact you anymore. How can I stop them from calling or writing me? q Write them a letter that says: This letter is to notify you that I do not wish you to call, write, or visit me at home or work about the money you claim I owe. q Include your account number and q Make a copy of the letter. Important: You still owe the money even if they stop contacting you and they can sue you to try to collect the debt you owe. 12 Call SLS for help or Search our website for help 5

6 How can I stop them from calling or writing me? (continued) Once they get your letter, A creditor is still allowed to contact you, but they will often stop. A collection agency is only allowed to contact you to tell you what action they will take. (For example, that they will sue you in court or they will not contact you again). What can't debt collectors do to try to collect? There are a many things debt collectors cannot do. They cannot abuse you, harass you, lie, or threaten you. They cannot talk about your debt to other people (including your neighbors, friends, relatives or employer). If they do any of these actions or those listed on the next page they are breaking the law. Debt collectors CANNOT Use abusive, obscene... See list on page 7 What can I do if the debt collector breaks the law? You should contact us or a private lawyer right away. You may be able to sue the debt collector for breaking the law and get some money from the debt collector. Call us at or (if you're over 60) You can also fi le a complaint with the agencies listed below. See Letter B in the back of this booklet. Consumer Affairs Division State Banking Department Constitution Plaza Hartford, CT Federal Trade Commission Debt Collection Practices Washington, DC Limit on Amount of Money Protected Two months worth of your direct deposits of child support, alimony, pension or government benefi ts or $ whichever is higher -- is automatically protected. Automatically Protected Money If you keep more than Whichever is higher... this protected amount in your bank account, the 2 months' debt collector may try to worth of take that money through benefits - or - $1,000 a bank execution. You will be able to get that money back if you file an exemption claim form. Direct Deposit of Paychecks Be careful if your paychecks are directly deposited. A debt collector CAN take that money from your bank account even if you make less than $348 a week ($360 in 2015). However, if you take home less than $348 a week ($360 in 2015), you will be able to get the money back after a court hearing. TIP: Instead of getting your pay directly deposited, it might be a good idea to get a paper per paycheck. What if a creditor tries to take money from my paycheck? It is common for a creditor or collection agency to threaten to take money from you paycheck. You may be protected -- see page 9. Also, see our booklet Wage Attachments. Should I think about bankruptcy? In some cases, bankruptcy may be a good option for you. (See our booklet, Are You Thinking about Bankruptcy?) 6 Call SLS for help or Search our website for help 11

7 Is money in my bank account "protected?" Some of the money in your bank account may be safe. But, you may have to fi le certain papers in court to protect it. Debt collectors CANNOT take money from your bank account if it is a direct deposit and comes from... Social Security benefi ts (retirement, disability, survivor) Unemployment benefi ts State welfare Child support Alimony Pension Disability benefi ts (SSI and SSD) If you think your money is protected, tell them that your income is exempt (cannot be collected) and you don't want to be contacted. To do this: q Write them a letter that says: This letter is to notify you that I do not wish you to call, write, or visit me at home or work about the money you claim I owe. This letter is also to advise you that all of my income is exempt from collection as established by law. q Include your account number, and q Make a copy of the letter. Debt collectors CANNOT... Use abusive, obscene, or profane language. If they begin to swear at you, call you names or speak to you abusively, you should hang up. Call you an unreasonable number of times. They cannot keep calling over and over until you pick up. Call you before 8 a.m. or after 9 p.m. Call you at work if you have asked them to stop. Threaten to harm you, your property or reputation, or someone else. Threaten to tell someone about your debt. Talk to other people about your debt without your permission. Say that they will sue you when they do not plan to do so. Lie about who they are or pretend they are a lawyer or the government. Suggest that you have committed a crime, will be arrested, or go to jail if you do not pay. Falsely state that the papers they sent you are legal papers from the court. Suggest that they can take your money benefits (such as Social Security disability, pension, retirement, child support, alimony or any other protected funds). Ask you to pay more than you owe. Share your debt information in other ways. For example, they cannot send you a postcard that gives information about your debt, put anything on an envelope that indicates the letter inside is about your debt, or print information about your debts in newspapers or magazines. Make you accept collect calls or pay for telegrams. (You should not accept the charges.) 10 Call SLS for help or Search our website for help 7

8 What can debt collectors do to try to collect? The things debt collectors can do depend on the type of debt. Debt collectors CAN... Talk about your debt with your spouse and your lawyer (if you told them your lawyer s name). Call your employer to confi rm that you work there or to get your contact information. Do other things depending on the type of debt. For example, ¾ Rent. Your landlord can take legal action to try to force you to move. (See our booklet: Eviction) ¾ Utilities. Your utility company can cut off service unless you pay the minimum amount due each month. But, the utility company can never cut off service if you have a life threatening condition. cannot cut off service during the winter (November 1 to May 1) if you qualify as a hardship case. (See our booklet, Help with Utility Problems) ¾ Items that can be repossessed (taken back) by the seller (for example -- a car). The debt collector can repossess the item from you. ¾ Mortgage. The bank can take your house by foreclosure. (See our booklet, Foreclosure: when you're behind on your mortgage) ¾ Other items. The debt collector can sue you. What happens if I am sued by the debt collector? The debt collector will have you served with legal papers. You must respond to the lawsuit or the debt collector will win. What can the debt collector do if he wins in court? If the debt collector sues you and wins, the court will decide you owe the debt and order you to pay a certain amount of money each week. Then, if you don t pay the court ordered amount each week, the debt collector can ask for a court order to take money from your pay or bank account, or take your property. (Some of your money & pay are protected...see below.) What can a debt collector do if he sues me and wins? A debt collector CAN... Take $ from your pay (wage execution) Take $ from your bank account (bank execution) Take your property (property execution) UNLESS... Your weekly take home pay is less than 40 times the minimum wage ($348 as of 2014, $360 as of 2015). UNLESS... Your money is protected because it is a direct deposit and is from Government benefi ts such as Social Security, unemployment, etc. Child support Alimony Pension UNLESS... You rent or you don't have any property to take. If you receive ANY type of Execution See next page for details on bank accounts. call us at OR if you're over 60, call the Court Service Center at the court, or call a private lawyer. Call right away! 8 Call SLS for help or Search our website for help 9