More than half of the states in the U.S. have laws that provide additional protection to consumers from debt collection by regulating the practices. Note that federal protections also exist regarding debt collection practices.
What Kind of Protections Do State Laws Supply?
Again, it depends on what state you live in. However, one example is the California Fair Debt Collection Act, which adds some aspects to the federal version of the Act. For one thing, whereas federal regulations only apply to the collection practices of the creditors themselves, the California version applies regulations to other groups, such as collection agencies, that the creditor may hire to collect the debt for them.
California also protects consumers in their division between their personal finances and their employment. Most of the time a creditor or collection agency cannot have any contact with your employer about your financial situation, and the circumstances where it can are very limited:
- To find out if you are still working for that employer
- To be sure you are working where you claim to be working
- To arrange the garnishment of your wages according to a court judgment
- If the debt involves a medical bill, the creditor may contact your employer to find out about the health insurance plan provided to employees
Some states also require that debt collectors be licensed by the state, as well as bonded. A few states, including California, have requirements that the collector agency must fulfill in order to be licensed by the state.
Seeking Legal Help
You may want to consult a bankruptcy attorney who has experience dealing with consumer credit issues. Your attorney will be able to explain to you your protections as a consumer under state and federal law. If you happen to be in any kind of debt that is leading to legal trouble, your attorney can represent you in court and help navigate you through the legal system.