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 dispute a debt and have it verified if you act within the 30-day window), 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 a written dispute before the 30-day window ends (30 days after you receive the collector's notice) |
| 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.