How do Colorado collection laws protect you when you're in debt?

If you're in debt, there's a strong possibility you're also dealing with harassing phone calls from debt collectors. Sometimes these are your legitimate creditors, with whom you signed a contract. Still, more often than not, the person calling you works for another organization since your debt has been sold to a debt collecting agency. It's not a good feeling to be contacted about your debts by anyone. When debt collectors cross the line, it may be downright frightening. Knowing your rights when it comes to debt collection is essential and liberating.

The Colorado Fair Debt Collection Practices Act (CFDCPA) regulates the conduct of debt collectors and collection agencies. It grants consumers certain rights and restricts the practices debt collectors may employ to collect debts. For instance, the law prohibits collection agencies from harassing, deceptive, and unfair conduct. The FDCPA applies to debt collectors who work to collect debts owed to someone other than themselves. So, the Act does not apply to in-house collections, such as when a bank with which you have a credit card contacts you directly.

What Collection Agencies Are Not Allowed To Do

1. Debt collectors can't call you at odd or inconvenient times

Collectors can’t call before 9 am or after 8 pm unless you or a court has granted permission to call outside of these hours. If an attorney represents you, debt collectors cannot contact you. Debt collectors cannot contact you at work if they know you are not permitted to receive such calls. And most importantly, they must tell you who they are and for whom they work when asked. 

2. Make a threat to arrest you

Collection agencies cannot falsely claim that you have committed a crime or threaten you with arrest if you do not repay the money they claim you owe. To begin with, the agencies cannot issue arrest warrants or have you imprisoned. Furthermore, failing to repay a credit card debt, mortgage, car loan, or medical bill on time does not result in incarceration. However, if you receive a legitimate order to appear in court on a debt-related matter and fail to appear, the judge may issue a warrant for your arrest.

3. Pretend to work for the government

The FDCPA forbids debt collectors from posing as government agency employees, including law enforcement. They cannot also claim to work for a consumer reporting agency.

4. Publicly humiliate you

Debt collectors are not allowed to publicly shame you into paying money you might or might not owe. They are not permitted to publish the names of those who owe money. They are not allowed to discuss the situation with anyone other than you, your spouse, or your attorney. They can contact third parties to locate you, but they are only allowed to ask for your address, home phone number, and place of employment.

How You Should Respond To Collection Calls And Letters

If you have outstanding debts, it may be tempting to screen or ignore calls to avoid speaking with a debt collector. However, several compelling reasons to answer the phone when a debt collector calls. Ignoring debt collection calls may make life easier for a while, but it will not solve the problem. Your debt situation could worsen and become a bigger problem in the future. If you repeatedly ignore calls from debt collectors, your credit score may suffer. This may make it difficult to obtain a loan in the future or even a part-time job, as many employers conduct credit checks before hiring.

When a debt collector calls, you should first confirm that they are a legitimate debt collector and that your debt is valid. If they do not provide this information immediately, ask the person calling their name and company. Inquire about the name of your creditor and the debt you owe. Make sure to inquire about how they can prove the debt is yours.

If you own the debt and are legally required to pay it, you may be able to reach an agreement with the collection agency. Some will settle for less than what you owe, while others will negotiate terms you can afford.

If you are told you owe a debt and do not believe it is yours or a scam, you have the right to dispute it. Begin by sending a written letter disputing the debt to the debt collection agency within 30 days of being contacted by a debt collector. Request verification of the total amount you owe in your letter. It's a good idea to send the letter by certified mail with a return receipt request. It can that your request was received. If the debt is not yours and collectors continue to contact you about it, send a cease and desist letter asking them to stop.

How long does a creditor or debt collector have in Colorado before they can file a lawsuit?

The statute of limitations is how long a debt collector has to file a lawsuit against you for unpaid debts. After this time, the court can't make you pay back an old debt. In Colorado, you only have six years to pay back most types of debt. The only exception is your auto loan debt, which only has a four-year statute of limitations.

Type of Debt

Colorado Statute of Limitations

Mortgage Debt

6 Years

Medical Debt

6 Years

Credit Card

6 Years

State Tax Debt

6 Years

Auto Loan Debt

4 Years

Once the time limit has passed, the debt can no longer be collected. Debt collectors can't garnish your wages or put a lien on your house or car anymore. You are still legally responsible for these. debts, though, and collectors can still call and write you to try to get you to pay.

Legal Solutions for Colorado FDCPA Violations

You can file a complaint with the Colorado Attorney General's office if you believe a debt collector or collection agency has violated the Colorado FDCPA. For violations of the Colorado FDCPA, the Colorado Attorney General's Office has the authority to investigate complaints and may take disciplinary or legal action.

If you win a civil lawsuit against the collection agency, you can recover actual and additional damages (not more than $1,000).

The court will consider, among other things, the frequency and persistence of noncompliance, the nature of noncompliance, and the extent to which noncompliance was intentional in determining the amount of the collector's or agency's liability. However, proving a violation of the federal FDCPA and the Colorado FDCPA will not result in double damages.

If you lose the lawsuit, the court may order you to pay the debt collector's attorneys' fees and costs.

If you believe a debt collector or collection agency has violated the Colorado FDCPA or the federal FDCPA while attempting to collect a debt from you, especially if a collection lawsuit has been filed against you, consult with an attorney to discuss your options.

The Bottom Line

If you have debt in Colorado, whether it's outstanding student loans, credit card balances that have ballooned, or unexpected medical bills, you are not alone. The Fair Debt Collection Practices Act (FDCPA) is a federal law that can protect you from debt collector harassment. If you are struggling with debt, there are several repayment strategies to consider depending on the type of debt you have and how much you owe. You can consolidate your debts or reach a settlement agreement with the help of an attorney. When you're in debt, it's tempting to go to any length to repay what you owe, but not all options are good. While a payday loan may appear to be a quick and easy fix, it will likely keep you in debt for longer.

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