Hawaii Debt Collection - What Debt Collectors Can & Cannot Do

Since 2001, Hawaii residents have carried a higher debt balance than the average U.S. consumer. Debt per capita stood at $77,410 in Hawaii and $55,480 in the U.S. in 2021, according to a Hawaii Consumer Debt Report: 2001 - 2021.

The state's high cost of living is the high outstanding debt. Hawaii is currently the most expensive place to live in, with a cost index of 193.3.

So, battling with high property taxes, rental rates, and expensive consumer goods with an income of $59,760, which is only slightly above the national average of $58,260, is an everyday occurrence for you.

It's only normal if you are in debt in Hawaii. If you can manage it right, credit is a good means to sustain your wants and desires.

But high debt often comes with higher chances of failed repayments and debts going into collections. If you fear the same, this article is an essential read.

Why? Because here, we will discuss everything you need to know about debt collection in Hawaii and the rules that ensure debt collectors follow a fair collection process.

We have also included a list of debt relief options at the end of the article if you find it challenging to stick to loan repayments.

What is Debt Collection in Hawaii?

Debt collection is when a debt collector tries to collect unpaid debts from borrowers.

Debt collectors work for debt collection agencies, though some work independently. Some are also attorneys.

If you cosigned a loan or are an authorized user on someone else's credit card, a debt collection agency might also try to get the money from you.

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Debt Collection Laws in Hawaii That You Should be Aware of

Debt collection in Hawaii is governed by the Fair Debt Collection Practices Act (FDCPA). It is a federal law that protects debtors from unfair debt collection practices such as harassment, abuse, and misrepresentation.

Here are some essential rules of the Act that you should know of -

Statute of Limitation in Hawaii

Statute of Limitation (SOL) is the time limit for a debt collector to file a lawsuit in court to recoup unpaid debts.

But the law does not say how long debt collectors can keep up their collection efforts. That means even if the time limit for filing a lawsuit has passed, debt collectors can continue with their efforts to get the money back.

The SOL clock starts when you miss your first payment date. And, every time you make a payment towards your debt, the clock restarts.

If a creditor or debt collection agency sues you or threatens to sue you after the deadline, you should talk to a lawyer. They can help you dismiss the case and ensure that your rights stay protected.

Sample Letter: Expired SOL notification letter

Rules of Communication that Debt Collectors Must Follow

(a) Communication With You

If you don't give debt collectors your consent or if they don't have permission from a court, they can't call you at odd times to talk about your debt. Say, early in the morning before 8 a.m. or late at night.

Debt collectors can't call you at a place that is known or should be known to be inconvenient. Say, at your place of work during work hours.

If collectors don't know your preferred time and place, they can assume that the best time to reach you is between 8 in the morning and 9 in the evening (your local time).

Note: If you hire an attorney to represent your case and a debt collector knows about it, they must contact your attorney, not you.

(b) Communication With Third Parties

Without your consent or the court's permission, debt collectors can't talk to anyone else besides you, the creditor, a consumer reporting agency, and any lawyers involved in the collection process.

(c) Ceasing Communication

If you report to a debt collector in writing that you don't want them to contact you or don't want to pay the debt they claim you owe, they must cease communication.

They can only contact you to inform the following -

• Their debt-collection efforts are being terminated.
• They are invoking specified remedies like filing a lawsuit against you.

Sample Letter:

• Cease and desist letter
• Request to stop debt collection

Harassment & Abuse is Prohibited

Debt collectors in Hawaii cannot resort to harassing or abusing you when attempting to collect a debt.

If a debt collector resorts to the following conduct, they violate the FDCPA -

• They use or threaten to use violence or other illegal means to harm you physically, destroy your reputation or attack your property.
• They use obscene or profane language.
• They keep calling you repeatedly with the intention of annoying, abusing, or harassing you.
• Upon calling you, they do not disclose their identity.

False Statements & Representation are in Clear Violation of FDCPA

Debt collection agencies can't say or do anything false, deceptive, or misleading to get you to pay back a debt.

You can take a debt collector to court if they do any of the following:

• They falsely represent the character, legal status, or amount of any debt.
• They lie about them being an attorney or representing an attorney.
• They falsely imply that nonpayment of any debt will result in arrest or the seizure of your property or wages.
• They distribute false documents while implying that those are authorized by any court, official, or agency of the United States or any State.
• They falsely claim that documents are not legal forms or that you don't need to do anything.
• They falsely represent or imply that they operate or are employed by a consumer reporting agency.

Validation of Debt in Hawaii

Within five days after the initial communication, a debt collector in Hawaii needs to send you a written notice containing the following -

• The debt amount.
• The name of the creditor to whom you owe the debt.
• A statement that if you don't dispute the validity of the entire debt or any part within 30 days of getting the notice, the debt collector will assume it to be valid.
• A statement that if you tell the debt collector in writing within 30 days that you dispute the debt or any part of it, they will cease communication and provide you with documents verifying the debt.
• A statement that the collector will give you the name and address of the creditor (if different from the current creditor) upon your written request within 30 days.

Sample Letter: Debt Validation.

Multiple Debts

If you owe more than one debt and make a single payment to a debt collector, they must direct the payment toward your chosen debt.

Also, the collector can't use the amount to pay off a disputed debt.

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What to Do If a Debt Collector in Hawaii Contacts You

When a debt collector calls, it can be scary. But keeping a level head and carefully handling the situation is essential.

Here's a checklist to remember when dealing with debt collectors in Hawaii -

• Find out the collector's name, address, and phone number.
• Find out how much you owe, including any fees like interest or collection costs. You should also find out what the debt was for when you got into the debt and the original creditor's name.
• Put the call on a recording. Keep the messages if the collector sends you abusive texts or voicemails.
• Try to communicate in writing to keep a paper trail.
• Make a written request to cease communication if you don't want to talk to the collector. (Remember, if you want to keep track of your debt or try to work out a deal, stopping communication won't help.)
• Tell the debt collector why you don't think the debt is genuine or why you shouldn't have to pay it. If you have a valid reason, the collector might stop collecting on their own.
• Don't tell them your bank account number, your Social Security number, or how much your property is worth. Debt collectors can later use the information as leverage against you. If need be, you can tell people the basics about your financial problems.
• Collectors might try to get you to pay as little as possible by saying it will stop them from suing you or helping your credit. But the truth is that your payment will reset the SOL clock.
• Don't lose your temper. If you later decide to negotiate a debt settlement with your creditor or sue them for breaking the FDCPA, swearing, yelling, or being hostile will hurt your case.

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What to Do if a Debt Collector Breaks the FDCPA Regulations

There are several avenues open if a debt collection agency violates the FDCPA.

You can file a complaint to the FTC or the CFPB.

Or, you can file a suit against the debt collector in state court. If you have incurred economic loss, such as lost wages, you may be able to sue for those damages. You can also be awarded up to $1,000 in statutory damages, attorney fees, and court costs. However, remember you may still be responsible for the original debt.

If you plan on suing, you must do so within one year from the violation date.

You can hire an attorney or fight your case. We recommend taking an attorney's help as there is much legal information to process and analyze.

You can sue in small claims courts if you want to handle the matter. The procedure is faster, but compensation for damages usually is limited.

If you're unsure whether FDCPA has been violated, you can report your situation to the Federal Trade Commission (FTC) or the Consumer Financial Protection Bureau (CFPB).

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Debt Relief Options in Hawaii That Can Help You Bypass Debt Collection Hassle

Debt collection in Hawaii can cause you a lot of headaches. Luckily, various debt relief options in Hawaii can make your financial obligations easier to handle and bypass the grueling debt collection process.

The options include -

• Debt Management.
• Debt Settlement.
• Debt Consolidation.
• Bankruptcy Filing.

Each option above follows a specific approach that works differently for people in different financial situations. So, it’s best to learn about each and choose the one that suits you.

Note: Explore and use these debt relief options for valid debts.

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Bottom Line

Managing debt in Hawaii is possible if you’re willing to be proactive. Remember your rights and the debt-relief options and take the following steps toward financial freedom.

Remember, it’s never too late to get back on top of your finances.

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult a qualified attorney for advice on your specific situation.