Hounded by Debt Collectors? Here Are Your Rights

Those who are quick to borrow money will probably be slow to pay it back.

The failure to pay back debt, or falling into a debt quagmire, can be expensive. The average American owes more than $92,700.

Still, you have many local and state rights when it comes to debt collection. Visit your state’s official website or contact a lawyer to learn your rights when it comes to debt collection.

Meanwhile, here are five rights you have when it comes to debt collection.

Debt collectors can’t harass you

A debt collector is legally barred from calling, texting, or contacting you online before 8 a.m. and after 9 p.m. Debt collectors cannot harass, verbally abuse or threaten you.

Debt collectors cannot call friends or relatives in order to embarrass you and compel you to pay your debt. And they can’t use third-party agents to try to collect the debt.

Write a letter demanding they stop calling or harassing you. They must comply.

There is a statute of limitations for debt collection

You should pay your debts. It is the financially responsible thing to do.

However, if you have spent three to six years ducking your creditors and debt collectors, then you may not have to pay back the debt.

Depending on the state you live in, a creditor or debt collector could have three to six years to sue you to collect their debt. After the statute of limitation has passed, they may become legally unable to collect the debt.

In some states, however, the statute of limitations for debt collection could be as long as 10 years.

Note that if you make a payment or a partial payment after the statute of limitations has passed the clock starts over. You could be hounded to pay the debt for another six years.

Spousal or familial debt

Debt collectors will lie to you and hound you to pay off a debt that a spouse or relative has incurred.

Unless you cosigned a loan or share a joint bank account with a spouse or relative, you have no legal obligation to pay for the debts of others.

Debt and death

Debt can survive death and be passed on to surviving relatives in certain circumstances.

If you live in a community property state, for instance, you could be saddled with your spouse’s debt after death. If you get divorced in a community property state, all assets accumulated after marriage are split evenly.

And, if your spouse dies with debt, that debt can be transferred to you,

Barring those circumstances, unless you shared a joint bank account, cosigned a loan, or entered any legal agreement to pay off a relative’s debt, then you can’t be legally compelled to pay the debt of a deceased relative.

Certain assets can’t be touched

Creditors may be able to sue you or your estate to reclaim a debt. But assets not part of an estate, as defined by local state law, cannot be seized by creditors.

For example, a creditor cannot claim life insurance, retirement funds, irrevocable trusts, or property previously owned by you but transferred to someone else in order to collect a debt.