Debt Collection Terms
6 terms
When consumers fall behind on payments, their accounts may eventually be sent to collections — either by the original creditor's in-house team or by a third-party debt collection agency. The Fair Debt Collection Practices Act (FDCPA) and CFPB Regulation F set strict rules on what collectors can and cannot do, but knowing your rights requires understanding the specific terminology.
Key concepts include the debt validation process (your right to demand proof of the debt within 30 days), statutes of limitations (after which collectors can no longer sue), and wage garnishment limits (federal law caps garnishment at 25% of disposable earnings). State laws add additional protections — some states like Texas, Pennsylvania, North Carolina, and South Carolina prohibit most wage garnishment entirely.
Your Rights Under the FDCPA
| Right | What It Means | How to Use It |
|---|---|---|
| Debt validation | Collector must prove they own the debt and the amount is correct | Send written request within 30 days of first contact |
| Cease and desist | Collector must stop contacting you (but debt doesn't disappear) | Send written notice — they can still sue but can't call |
| No harassment | No calls before 8am/after 9pm, no threats, no public disclosure | Document violations, file CFPB complaint |
| Dispute rights | Challenge the debt amount, dispute credit report entries | Dispute in writing with collector AND credit bureaus |
See Dealing with Debt Collectors for a complete guide to your rights and how to exercise them.