Consumer Debt Laws

Know your rights as a consumer.Debt concept - cutting a credit card image by Sophia Winters from Fotolia.com

Receiving unwanted calls from bills collectors, losing sleep and worrying over debt is all too common in an economic times. Fortunately, consumers who are not being treated fairly by debt collectors, can receive protection against this. Groups such as the Federal Trade Commission are responsible for protecting consumers from unfair debt collection practices. If you are feel you are being harassed by the companies to whom you owe money, you can rely on a number of laws which were enacted to protect the rights of consumers. However, always consult a lawyer when you are faced with any legal issue.

Fair Credit Billing Act

The fair credit billing act has been around for over 35 years. Under this law, a consumer sends a written letter to their credit card company in the event that the consumer finds an error on their actual credit report. Locate the correct credit card company address by looking on the back of thecard or find a new billing statement to obtain the location where your letter will be sent. Be sure your letter of dispute is sent within 60 days of obtaining your bill in order to comply with the requirements of this law.

Consumers who take advantage of this document are able to cancel various loans within a period of 3 days of obtaining the loan. This federally enacted law also holds banks, savings and loan companies and mortgage brokers accountable to strict lending standards pertaining to crucial lending data such as rate of interest and ensures that each person who is on the loan knows the exact terms of the financial instrument. Read your entire loan document before signing it so that you understand all of the data that is present in the loan.

Know the laws as they relate to debt collection in your state. The period of time in which a creditor can sue you to collect any funds that are owed to them is known as the statute of limitations. However, each state has a certain period of time to obtain these funds after they attempt to file a lawsuit. Contact a lawyer to find out what the statute of limitations are in your state. If the company suing you has not met the statute of limitations, they may have given up their right to pursue legal action.