You’re struggling with your bills. Maybe you had health problems or maybe some unexpected expenses came up and you’ve fallen behind. Now debt collectors are calling you and demanding payment. What are your rights?
The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) protects you from harassment by debt collectors. It regulates how debt collectors can contact you, what they can and can’t say to third parties, and what they can and can’t say to you.
The FDCPA prohibits debt collectors from contacting you at an unusual time or place. That means they can’t call at 3:00 in the morning. In fact, they can only call between 8:00 a.m. and 9:00 p.m. They can’t call you repeatedly in an attempt to harass you. If you have an attorney and inform the collectors, they can’t call you at all. All communication then has to go through your attorney. If debt collectors contact you in writing, the envelope has to be unmarked. If anyone else sees it, they shouldn’t be able to tell it’s from a collection agency. This is meant to protect information about debtors’ private financial business from exposure to third parties.
Contacting Third Parties
In the name of privacy, debt collectors can’t talk to anyone but you and your attorney about your debt. Debt collectors used to threaten to share information about the debt with friends, family, or coworkers, but the FDCPA labels such behavior as harassment and forbids it. Debt collectors may contact your employer to get your employment information and address, but that’s it. They can’t ask for other information about you and they can’t tell your employer anything about the debt. They can’t talk to your family, friends, or anyone else about you or your debt.
What Debt Collectors Can and Can’t Say
The FDCPA is, in part, a response to horror stories of debt collectors threatening to hurt debtors and their families. The law prevents any such behavior now. Debt collectors can’t swear at you, threaten you with physical violence, or threaten to do anything else they don’t have the legal right (and the intention) to do. In other words, unless they can actually sue you and intend to do so, they can’t mention it to you. They also can’t threaten to expose information about your debt to anyone else. You have the right to decent treatment by debt collectors and that means no threats or harassment.
In New Jersey, no discussion of debt is complete without a mention of gambling. If you’ve spent a chunk of cash at one of the Atlantic City casinos, you’ve probably been offered a line of credit with the casino. Like the lack of windows and clocks, it’s another way for casinos to get you to stay a little longer and spend a little more than you planned.
How does casino credit work?
Casinos are carefully regulated entities. Gambling is a sensitive subject and the state wants to be seen to protect consumers. So, casinos can only take certain kinds of payment. Cash is always best, but you can write a personal check to the casino or trade a traveler’s check for chips. You can’t cash your paycheck or your social security check for chips. Of course, casinos only make money if you spend money. They want you to have access to funds. Enter casino credit.
If you’re interested in signing up for a line of credit at a casino, you can contact them for an application. You fill it out, they do a credit check, and then they offer you a line of credit. Basically, it’s an interest free short-term loan. When you go into the casino, you’ll have to sign a marker, which is similar to a personal check, for the cash. By signing the marker, you’re agreeing that you have the funds to cover the money you’re borrowing. Then the casino gives you chips for your marker and you can head to the tables.
Ideally, you break even or come out ahead, so you can pay the casino back before you leave. Statistically, you’ll lose some and leave without settling your account. The casino will send you a bill for what you owe. If you don’t pay it in full, you’ll start accruing serious interest charges.
What happens if I don’t pay?
Like any creditor, the casino will try to collect from you. They’ll probably send you notices that you’ve defaulted on your line of credit and they’ll freeze your access to credit in the casino. They’ll call and attempt to collect, and if that fails they will either sue you for collection or assign your account to a collection agency.
Historically, gambling debt was often considered unenforceable. In other words, if you didn’t pay, there was nothing the casino could do about it. State legislatures felt that it went against their policy interests (and their likelihood of reelection) to support the claims of casinos against debtors. In recent years, however, the attitudes of lawmakers and courts have changed somewhat. In New Jersey, gambling debt is treated the same as any other debt. Signing a marker without the funds to back it is like writing a bad check, which can result in criminal proceedings.
The Debt Collection Process
Generally, debt collectors are bound by the FDCPA. Unfortunately for gamblers, casinos (like banks) aren’t considered debt collectors because debt collection isn’t their primary line of business. The FDCPA only applies if the casino assigns the debt to a collection agency. That means you may get frequent calls around the clock as the casino tries to collect what you owe.
If debt collectors are calling and you can’t or won’t pay, they’ll take you to court. When they sue, you’ll receive notice from the court stating the amount for which they’re suing and giving you a court date. You’ll send an answer to the court stating that you don’t owe the debt, that the amount is wrong, or that you shouldn’t have to pay the debt at all. Then you’ll go to court and the judge will decide whether or not you owe the debt. You don’t technically have to send an answer or even show up to court, but you certainly should do so. It’s your last chance to fight the debt. If you don’t answer or appear, the court will decide in favor of your creditor by default. Then you’re stuck with the debt for good.
Once the collector has a judgment against you, it can get a court order to garnish your wages, attach a lien to your home, levy your bank account, or seize and sell your property.
If you’re struggling with debt and collectors are calling, you have an alternative: bankruptcy. It’s a last resort for many consumers, but it may give you the chance to start again debt-free. When you file for bankruptcy, you receive the protection of the automatic stay. With the automatic stay in place, creditors are legally barred from attempting to collect. Collection calls have to stop, garnishment has to stop, lawsuits have to stop, and no one can repossess or seize any of your property. Through the bankruptcy process, all of your unsecured debt, gambling debt included, can be discharged and you can generally keep most, if not all, of your assets. When the bankruptcy ends, you won’t owe your creditors anything and they won’t be able to threaten to sue you or seize your property. If you’re struggling with debt, contact our experienced attorneys to discuss your rights and options as a debtor.