Other Debt and Credit Laws
Filing for bankruptcy is not for everyone. Some people do not qualify under Chapter 7 or Chapter 13; others may be reluctant to file. There are other ways in which federal laws can help protect consumers dealing with debt.
Consumer Credit Protection Act
The CCPA (15 U.S.C. § 1601 and following) protects employees from discharge by their employers because their wages have been garnished for any one debt, and limits the amount of an employee's earnings that may be garnished in any one week.
Credit Repair Organizations Act
CROA (15 U.S.C. §§ 1679-1679j) prohibits untrue or misleading representations and requires certain affirmative disclosures in the offering or sale of "credit repair" services. The Act bars "credit repair" companies from demanding advance payment, requires that "credit repair" contracts be in writing, and gives consumers certain contract cancellation rights.
Fair Credit Reporting Act
The Act (15 ;U.S.C. §§ 1681-1681(u),as amended) protects consumers' personal information collected by reporting agencies such as credit bureaus, medical information companies and tenant screening services. The information in a consumer report cannot be provided to anyone who does not have a valid purpose, as specified in the Act. Users of the information for credit, insurance, or employment purposes must notify the consumer when an adverse action is taken on the basis of such reports. Further, users must identify the company that provided the report, so that the accuracy and completeness of the report may be verified or contested by the consumer.
Fair Debt Collection Practices Act
FDCPA (15 U.S.C. § 1692 and following) applies to personal, family and household debts. This includes money owed for the purchase of a car, medical care or charge accounts. The FDCPA prohibits debt collectors from engaging in unfair, deceptive or abusive practices while collecting these debts. Debt collectors are prohibited from doing the following:
- Call you repeatedly or contact you at an unreasonable time (the law presumes that before 8 a.m. or after 9 p.m. is unreasonable).
- Place telephone calls to you without identifying themselves as bill collectors.
- Contact you at work if your employer prohibits it.
- Use obscene or profane language.
- Use or threaten to use violence.
- Claim you owe more than you do.
- Claim to be attorneys if they're not.
- Claim that you'll be imprisoned or your property will be seized.
- Send you a paper that resembles a legal document.
- Add unauthorized interest, fees, or charges.
- Contact third parties, other than your attorney, a credit reporting bureau, or the original creditor, except for the limited purpose of finding information about your whereabouts. Unless you have asked collectors in writing to stop contacting you, they can also contact your spouse, your parents (if you are a minor), and your codebtors.
Fair and Accurate Credit Transactions Act of 2003
This amends the FCRA (15 U.S.C. §§ 1681-1681x) by giving consumers the right to one free credit report a year from credit reporting agencies; consumers may also purchase (for a reasonable fee) a credit score along with information about how the credit score is calculated. The Act also enables consumers to place fraud alerts in their credit files. Further, the act grants consumers additional rights with respect to how their information is used.
Home Ownership and Equity Protection Act
HOEPA (15 U.S.C. § 1639) establishes disclosure requirements and prohibits equity stripping and other abusive practices in connection with high-cost mortgages.
Servicemembers' Civil Relief Act
(50a U.S.C. § 501 and following) If you are an active-duty member of the armed forces, you are entitled to a reduced interest rate on existing debts.
Truth in Lending Law
(15 U.S.C. §§ 1601-1667f,as amended) All creditors who deal with consumers are required to make certain written disclosures concerning all finance charges and related aspects of credit transactions (including disclosing finance charges expressed as an annual percentage rate). The Act also establishes a three-day right of rescission (i.e. cancellation) in certain transactions involving the establishment of a security interest or lien in the consumer's residence.