The Complete Debt Collection Glossary

Consumers have the right to hire an attorney to handle all communications with debt collectors. Once a collector knows you have legal representation, they must communicate exclusively with your lawyer — not you directly.

A third-party company hired by creditors to collect debts owed by consumers. Unlike original creditors, collection agencies must comply with all FDCPA requirements, including providing written validation notices and honoring cease-and-desist requests.

Additional fees and interest that may be added to the original debt balance by collectors or creditors. These can include late fees, attorney fees, and administrative costs. The FDCPA prohibits collectors from charging amounts not authorized by the original agreement or state law.

The practice of reporting debt payment history to credit bureaus — Equifax, Experian, and TransUnion. Collectors can report delinquent debts but must accurately report the status. Negative information generally stays on your report for seven years from the date of first delinquency.

Under the FCRA, consumers have the right to dispute any inaccurate information on their credit reports. Credit bureaus must investigate within 30 days and remove or correct unverifiable items. You can dispute online, by mail, or by phone with each bureau.

A company that purchases delinquent debts from original creditors for pennies on the dollar, then attempts to collect the full face value. Debt buyers must still follow the FDCPA, but often have incomplete records — which is why debt validation is especially important when dealing with them.

Your right under FDCPA Section 809 to request proof that a debt is valid and that the collector has the legal right to collect it. You must send a written validation request within 30 days of receiving the initial notice. The collector must cease all collection activity until they provide verification.

A formal written letter sent to a debt collector challenging the validity or accuracy of a debt. Sending a dispute letter within 30 days of initial contact triggers your validation rights under the FDCPA. Always send via certified mail with return receipt to create a paper trail.

All written records related to a debt, including the original contract, payment history, correspondence with collectors, and any validation letters. Maintaining thorough documentation is critical if you need to dispute a debt, file a complaint, or sue a collector for FDCPA violations.

Income and property that federal or state law protects from seizure by creditors and debt collectors. Federally exempt funds include Social Security benefits, veterans' benefits, disability payments, and certain pensions. Collectors cannot garnish these funds even with a court judgment.

The FCRA (15 U.S.C. § 1681) is a federal law that regulates how consumer credit information is collected, shared, and used. It gives you the right to access your credit report, dispute inaccurate information, and requires bureaus to investigate disputes within 30 days. Collectors who report false information violate the FCRA.

The FDCPA (15 U.S.C. § 1692) is the primary federal law regulating third-party debt collectors. Enacted in 1977, it prohibits abusive, deceptive, and unfair practices — including harassment, false threats, contacting you at inconvenient times, and discussing your debt with third parties. Violations can result in up to $1,000 in statutory damages per lawsuit plus attorney fees.

A legal process where a court orders a third party — such as an employer or bank — to withhold money to pay a debt. Wage garnishment for consumer debts is limited to 25% of disposable earnings under federal law, or the amount exceeding 30 times the federal minimum wage, whichever is less.

Under the FDCPA, debt collectors are prohibited from engaging in conduct "the natural consequence of which is to harass, oppress, or abuse any person." This includes repeated phone calls, threats of violence, obscene language, publishing lists of debtors, and calling before 8 a.m. or after 9 p.m. in your time zone.

A court-ordered deduction from a debtor's paycheck to satisfy a judgment. Employers must comply with withholding orders and are prohibited from firing an employee solely because their wages are garnished for one debt under the Consumer Credit Protection Act.

A debtor whose income and assets are exempt from collection, meaning a creditor cannot successfully garnish wages or seize property even with a court judgment. Individuals who are retired, disabled, or have only exempt income sources like Social Security are often considered judgment-proof.

The tendency of some debt buyers — particularly large firms — to file thousands of lawsuits against consumers, often with incomplete documentation. Many consumers lose these cases by default simply because they did not respond to the lawsuit. Always respond to a debt collection lawsuit, even if you believe the debt is invalid.

A required disclosure under FDCPA Section 807 where a debt collector must state in every communication that they are attempting to collect a debt and that any information obtained will be used for that purpose. Failure to include this disclosure is an FDCPA violation.

The company or entity that originally extended credit to the consumer — such as a bank, credit card issuer, or medical provider. The FDCPA does not apply to original creditors collecting their own debts, only to third-party collectors and debt buyers.

The right of individual consumers to sue debt collectors in state or federal court for FDCPA violations. Under Section 813, consumers can recover up to $1,000 in statutory damages, actual damages, and attorney fees. This provision makes it financially viable for consumers to enforce their rights.

Specific actions that the FDCPA explicitly bans, including threats of violence or arrest, using obscene language, misrepresenting the amount owed, falsely threatening legal action, adding unauthorized fees, calling before 8 a.m. or after 9 p.m., and communicating the debt to third parties like employers or neighbors.

The time limit within which a creditor or collector must file a lawsuit to collect a debt. This varies by state and type of debt — typically 3 to 6 years for most consumer debts. After the statute expires, the debt is "time-barred," but collectors can still attempt to collect — they just cannot sue.

The TCPA (47 U.S.C. § 227) restricts how debt collectors and other businesses can contact consumers by phone. It prohibits robocalls and auto-dialed calls to cell phones without prior consent. Collectors who violate the TCPA can be fined $500 to $1,500 per illegal call — making it one of the most powerful consumer protection tools.

A debt for which the statute of limitations has expired, meaning the collector cannot successfully sue to collect it. However, collectors can still ask you to pay and may report it to credit bureaus within the seven-year reporting window. Making a partial payment on a time-barred debt may restart the statute of limitations in some states.

A written notice that debt collectors must send within five days of their first contact with you. It must include the amount of the debt, the name of the original creditor, and a statement that you have 30 days to dispute the debt in writing. Failure to send this notice is an FDCPA violation.

A court-ordered deduction from an employee's paycheck to repay a debt. Under the Consumer Credit Protection Act, the maximum that can be garnished is 25% of disposable earnings or the amount by which weekly income exceeds 30 times the federal minimum wage — whichever is less. Some debts like federal student loans and taxes have different limits.