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 DOWNEASTER COMMON SENSE GUIDE
DEBT COLLECTION

BY DAVID LEACH, MPA, AND ARIANNA CASTONGUAY

PAUL R. LEPAGE ANNE L. HEAD

GOVERNOR COMMISSIONER

WILLIAM N. LUND
SUPERINTENDENT

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 Maine Bureau of Consumer Credit Protection
Toll-free Maine Consumer Assistance Maine Foreclosure Prevention Hotline
1-800-332-8529 (1-800-DEBT-LAW) 1-888-NO-4-CLŌZ
TTY users call Maine relay 711 (1-888-664-2569)

www.Credit.Maine.gov

The Maine Bureau of Consumer Credit Protection was established in 1975 to enforce many
important consumer financial protection laws, including:
• -Consumer Credit Code
• -Truth-in-Lending Act
• -Fair Credit Billing Act
• -Truth-in-Leasing Act
• -Fair Credit Reporting Act
• -Fair Debt Collection Practices Act
• -“Plain Language” Contract Law

The Bureau conducts periodic examinations of creditors to determine compliance with these
laws; responds to consumer complaints and inquiries; and operates the state’s foreclosure
assistance hotline and housing counselor referral program. The Bureau also conducts
educational seminars and provides speakers to advise consumers and creditors of their legal
rights and responsibilities.
William N. Lund
Superintendent
November 2017

DOWNEASTER COMMON SENSE GUIDE: DEBT COLLECTION

By David Leach, MPA and Arianna Castonguay
Editor: Steven Lemieux, MBA | Cover Featuring Frank Kimball, Bureau of Insurance
Special Thanks to Eric Wright, Mark Susi and Will Lund for their input on content for this
guide
Copyright © 2015 | Bureau of Consumer Credit Protection, State of Maine
The contents of this book may be reprinted, with attribution.

Maine residents can obtain additional free copies of this booklet by contacting the Bureau of
Consumer Credit Protection at 207-624-8527 or toll-free at 1-800-332-8529. Non-Maine
residents may purchase the publication for $6 per copy, or at a volume discount of $4 per copy
on orders of 50 or more. Shipping fees are included in the prices listed.
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Dear Maine Consumers:

Credit applicants often feel confident about the future. They believe they will not only be able
to repay the full amount borrowed for a house, automobile, college education, boat, or even a
credit card charge, but that they can do so over time while paying interest!

Lenders also exhibit confidence when granting a loan. Those in the mortgage field take security
interests in homes—extending hundreds of thousands of dollars in credit to borrowers who
may experience job changes and other economic “ups and downs” over a 15 to 30 year term.
Auto lenders grant loans of shorter duration (typically 3-7 years), but on collateralized items
that steadily depreciate in value. New vehicles often lose 50% or more of their original value in
four or five years! Nearly all credit cards issued are unsecured loans, with no house to foreclose
on or car or truck to repossess if payments are not made.

The economies of both the United States and Maine depend to a large degree on consumer
loans and credit sales. Consumers are able to defer payment for important items they are
unable to pay for up front with cash. A vibrant Maine financial services industry, employing
tens of thousands of Maine workers, depends on those obligations being paid back on time and
as agreed! But what happens when loans become delinquent?

Some creditors hire third-party debt collectors to seek repayment of consumer loans or other
forms of debt that have become past-due. The activities and behavior of collection agencies are
governed by the state and federal Fair Debt Collection Practices Acts, or FDCPAs. These laws
establish how a debt collector conducts its business and grant specific rights to the borrowers
and debtors.

As authors of this guide, we hope the information presented helps you to better understand
your rights and responsibilities when faced with debt collection. We designed this guide to
present you with strategies to bring your account current again and help you to work
constructively to resolve the debt with the original creditor, third-party collection agencies or
debt buyers.

Sincerely,

David Leach, MPA Arianna Castonguay

Principal Examiner Margaret Chase Smith Summer Intern, 2015

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6
 Table of Contents
FDCPA Consumer Protections 1
 Communications from Debt Collectors
 Communicating with Third Parties
 Ceasing Communications
 Validation of Debts
 Harassment or Abusive Practices
 False or Misleading Representations
 Unfair Practices
 Multiple Debts

Legal Rights Under the FDCPA 6

 What to do if you are Served by a Debt Collector
 How Does a Statute of Limitations Work?
 What can you do if a Debt Collector Violates the FDCPA?
 Damages for FDCPA Violations
 What Does it Mean When an Account is Charged Off?

Repossessions, Foreclosures, and More 10

 Repossessions
 Foreclosures
 Garnishments and Judgments
 Liens
 Bankruptcy

Debt Collection Scams 16

Glossary, Sample Letters, and Resource Listings 18

 Glossary
 Sample Response Letters to Debt Collectors
 Free Publications and Consumer Resources

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 The Internal Revenue Service,
Private Debt Collectors, And You

In the spring of 2017 the Internal Revenue Service (“IRS”) hired four private debt collectors
to act as agents collecting long-overdue tax bills. A bill enacted by Congress and signed by
President Obama in 2015 authorized this action.

Debtors contacted multiple times by the IRS in the past will receive a “goodbye letter” from
the IRS with a case file number. The letter announces the transfer of the collection effort to
one of four collection agencies. These agencies are:

CBE Group of Cedar Falls, Iowa

Conserve of Fairpoint, New York
Performant of Livermore, California
Pioneer of Horseheads, New York

Each of these agencies is currently licensed by the State of Maine Bureau of Consumer Credit
Protection. After receiving the account, the collection agency will send a “hello letter” to the
debtor. The hello letter contains the same case file number, and announces the agency is
acting as an agent/contractor of the IRS, and is attempting to collect federal tax monies
owed. Checks to these agencies should be made payable to “United States Treasury.”

The IRS’s Treasury Inspector General for Tax Administration (TIGTA) has set up a hotline
(1-800-366-4484) for consumers to place complaints against the collection practices of these
private companies. Formal letters of complaint can be mailed to:

Treasury Inspector General for Tax Administration

PO Box 589
Ben Franklin Station
Washington, DC 20044-0589

Scammers often try to steal money from taxpayers by informing callers they will be arrested,
thrown in prison, or immediately taken to court if they don’t send funds. Scammers often ask
for payments in the form of wire transfers, prepaid debit cards, iTunes cards, money orders
or gift cards. They also try to obtain the victim’s Social Security number, date of birth, street
address and banking information in order to steal the person’s identity and siphon money
from their accounts. Don’t fall for this scam. The IRS will never require you immediately
transfer funds. They will set up a series of communications, starting with a formal written
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notice that you owe federal taxes.
 FDCPA Consumer Protections

The federal government established the Fair • The debt collector’s attorney; and
Debt Collection Practices Act (“FDCPA”) in • If permitted by law, a consumer
1977. This law was designed to end abusive, reporting agency.
deceptive or unfair debt collection practices.
It also encouraged individual states to protect If the consumer is a minor, the collection
consumers from abuses in debt collection. agency may contact the debtor’s parents
The Maine Legislature enacted a state version or guardians. You can give collection
of the FDCPA in 1985. agencies permission to contact other parties
not listed above. A court with jurisdiction
Communications From can also authorize third-party contact.
Debt Collectors
Sometimes, debt collectors cannot locate
Debt collectors cannot contact consumers at consumers. If that happens, the collector
unusual times or places. Unusual times may ask a neighbor or relative for the
include calls placed before 8:00 AM or after borrower’s address, phone number and/or
9:00 PM. Collectors can call between these workplace. The caller must give their name,
times all seven days of the week. If there are and state they are confirming or correcting
specific times you don’t want collectors to information about the borrower’s location.
call you, notify the collector in writing. They The collector cannot disclose that the
must comply with your request. Keep in consumer owes a debt. The collector can
mind, communications from debt collectors only say they work for a collection agency if
cannot be at the consumer’s expense (e.g., asked. Collectors can’t contact third parties
charging for collect telephone calls). more than once, unless the information they
received was incorrect or the person asked to
Debt collectors may communicate only with be contacted again.
the debtor or certain third parties, including:
Debt collectors can contact you at work,
• The consumer’s spouse; unless your employer forbids such
• The consumer’s attorney, executor, or communications. If you send a written
administrator; “cease” letter to the collector, they should
stop calling you at work (see page 23 for a
• The creditor or the creditor’s attorney;
sample cease letter). Likewise, if your
Words and phrases in bold are defined starting on page 18.

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 DEBT COLLECTION ETIQUETTE

It’s important to remember that debt collectors are people too. Here are seven things to keep in
mind when speaking with them.

1. Be cautious when communicating with collectors. If you don’t know whether a debt is
yours, don’t acknowledge responsibility for it. If you agree you owe the debt, it will be
difficult to challenge the collector in the future - even if you present evidence you don’t
owe the debt. If you are not sure you owe a debt, ask for written validation within 30 days
of receiving of the collector’s first written communication. If they cannot confirm the debt
is yours, the collection action should stop.

2. Tell collectors the best times of the day to reach you, and what telephone number is best. If
you prefer to communicate only through the mail, tell them.

3. If calls to your workplace are not allowed, or if they could threaten your job, tell the
collector. It’s a violation of the FDCPA for the collector to continue to contact you at work
after being told to stop. Follow up in writing to secure your right to stop collection calls to
your place of employment.

4. Be polite and work with the debt collector. Keep the lines of communication open
and always return calls, even if you are unable to pay that day, week or month. If you owe
this debt, work to repay it in as short a period of time as your budget will allow. Offering
$5.00 per month on a $1,000.00 debt won’t cut it. It would take more than 16 years to repay
the loan! Negotiating a payment of $200 per month, if you can afford it, stands a much
better chance of acceptance.

5. Only make promises you can keep, and keep your promises! If you set up a series of
payment dates, do your best to follow through. Emergencies can occur. If possible, inform
the collector in advance if special circumstances arise.

6. You have a right to refuse to send postdated checks to the collector. Postdated checks are
rarely a good idea. If you chose to pay with checks, only send one at a time!

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employer tells a collector not to contact you sell the debt to a different collection agency
at work, the collector should stop. If the or send the file to an attorney. If a lawyer
collection agency knows you have hired an takes the case and obtains a judgment from
attorney, the collector can contact you only the court, a judge may order you to pay the
through that attorney (unless your attorney amount due. For more information on debt
agrees to allow direct communication). The collection lawsuits, see page 6.
collector may still contact you directly if the
attorney doesn’t respond to them, or if they Don’t let the threat of a lawsuit frighten you.
need the attorney’s contact information. There are times when the best approach is to
tell the collector to stop communicating with
Debt collectors cannot communicate with you. If a debt collector calls excessively, uses
consumers using postcards. Envelopes sent profane language or makes threats, stop
by debt collectors cannot display symbols or communication. If the collection agency is
writing indicating the letter is from a legitimate, the harassment should stop.
collector, or that the enclosed letter is about
a debt. Verifying Debts

Ceasing Communication Creditors often sell debts to other

companies. It can be hard to know for sure
You have the right to tell debt collectors to whether you owe a specific debt. If you think
stop contacting you. To do so, send your you might owe the debt, ask the collector to
request—in writing—to the collection verify the debt. You have the right to dispute
agency. Stopping communication is rarely the debts and request verification within 30 days
best solution. It may free up your telephone of receiving the first written notice of the
line, but it won’t wipe out your debt. debt from a collection agency. Until the
Stopping communication also limits the collection agency sends proof you owe the
amount of information you will receive debt, it must stop its collection efforts.
about the debt—including settlement offers.
Once a collection agency receives your The first written communications from debt
request, they can only contact you to tell you: collectors must include:

• Their collection efforts have stopped and • The amount of the debt;
they are ending communications; or • Whom the consumer owes the debt to;
• They will (or may) take certain actions, • Notification that the consumer has thirty
such as sending the case to an attorney to days from receiving the notice to dispute
collect the debt. the debt;
• Notification the collector will verify the
Ceasing communication may increase the debt if it receives a request in writing;
chance of a lawsuit. The debt collector could and

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• Notification that if the consumer the names of consumers who have unpaid
requests the name and address of the debts. They can, however, report debts to
original creditor within thirty consumer reporting agencies (“credit
days, they will provide that bureaus”).
information*.
False or Misleading
If the debt collector doesn’t provide this Representations
information in their first written
communication, it is their responsibility to Debt collectors cannot use false, deceptive
send written validation of the debt to you or misleading representations to collect
(unless you pay the debt within five days of debts. Collectors also can’t suggest they’re
receiving the communication). with the government. As such, collectors
can’t distribute documents that appear to be
Harassment or Abusive Practices “official” (e.g., appear to be approved by a
court or government agency), unless the
The FDCPA prohibits harassment and documents are, in fact, official documents.
verbal abuse by debt collectors. Before Debt collectors also can’t claim to be
Congress enacted the FDCPA, some attorneys (unless the actually are) and can’t
collectors harassed consumers—pressuring suggest they’re law enforcement.
them to pay off debts. Under current law,
collectors can’t threaten violence. They can’t Sometimes collectors can claim to work for
threaten to harm a person’s reputation or or with the government, such as when they
property, and they can’t threaten to harm are trying to collect unpaid taxes, child
third parties (e.g., family members or co- support, or are working with a check
workers). Debt collectors are not allowed to diversion program under contract with a
swear or use profane language. Collectors district attorney. If a debt collector calls you
are also not permitted to annoy, harass, or and claims to work for the government, tell
abuse people by calling incessantly, and they them to mail you the information in writing.
can’t speak to debtors without identifying Do some legwork and check them out on
themselves first. If you experience these your own, before calling back.
practices, file a complaint with state
regulators. The FDCPA mandates truthful
representation of debts. Debt collectors
Debt collectors can’t advertise the existence cannot misrepresent the character, the
of debt to coerce consumers to repay debt. amount or legal status of debts. They are
The FDCPA forbids them from publishing prohibited from lying about the payment

*If you make this request or dispute any portion of the debt within thirty days from receipt of the notice, the
collection agency must halt collection efforts until they mail the requested information to you or provide proof you
owe the debt.
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they’ll receive for collecting a debt, and can’t accept checks postdated by more than five
threaten actions which they have no days, unless they notify the consumer, in
intention of performing — including writing, of the date they intend to deposit the
imprisoning debtors or seizing property, check. The collector must send notice at least
(unless they intend to go to court and take three days before the date of deposit. They
action that could result in the property being cannot send the notice more than ten days
seized). before depositing the check. Debt collectors
can’t use postdated checks as leverage—
Debt collectors are not allowed to tell threatening criminal prosecution for
consumers they will sell a debt to a third insufficient funds—and they can’t deposit
party, unless they actually intend to do so. (or threaten to deposit) postdated checks
They cannot claim the debtor committed a before the date written on the check.
crime (unless the debtor did), disgrace the
debtor using other conduct, or lie about the
collection agency’s name. Collectors can’t
threaten to repossess or disable property if
the creditor does not intend to do so, or if
the creditor doesn’t have a security interest in
the property. They can’t threaten to
communicate false credit information and
can’t claim to work for a credit bureau,
unless the collection agency they work for is
a credit bureau.

Unfair Practices

Everyone has the right to receive fair and

honest communications from debt
collectors. Collectors can’t add interest, fees
or other charges to debts, unless the original
contract authorizes those charges (or the
charges are otherwise permitted by law). To
keep their dealings fair, debt collectors can’t

If a collector is trying to collect several debts from you, you

can choose how your payments are applied. Debt collectors
can’t apply payments to disputed accounts against your
wishes.

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 Legal Rights Under the FDCPA

If you owe money to a creditor and are should always file a written answer to the
behind on payments, there is a chance the complaint with the court.
creditor will sue to recover the debt.
Lawsuits start when the creditor or collection Usually, you have up to 20 days to file a
agency files a complaint with the court, or written response to the lawsuit. Address your
when documentation is served on you. response to the court, and send a copy to the
Collection lawyers can bring legal actions to other side’s lawyer. The response is a formal
collect debt, but must follow strict rules. legal document. You may want to hire a
Lawsuits to collect debts may only be filed in lawyer to help you. Your written answer
the judicial district in which the consumer must address each allegation against you
lives (or the district where the contract detailed in the complaint. Be careful not to
creating the debt was signed). Lawyers admit anything that you do not know for a
cannot bring lawsuits to enforce security fact to be true. It is vital to raise all possible
interests in real property—land, or property defenses to the lawsuit (for example, that the
attached to land—outside the judicial district debt is too old to be the subject of a lawsuit).
where the property is located.
Not responding to the complaint in time will
Getting served means you have received most likely lead the creditor to ask the court
documents notifying you of a lawsuit and the to issue a default judgment. Even if you owe
grounds or basis of the claim against you. the debt, have no defenses and the amount
You are served when you (or someone “of requested by the creditor reflects what you
suitable age and discretion”) are handed a owe, it’s still worthwhile to respond and
copy of the summons and complaint. For begin communicating with the court. If you
Small Claims Court actions, notices are sent don’t respond, you lose the right to become
by mail. The complaint will list you as a an active participant. If possible, contact an
defendant, along with any person who was a attorney and take part in the process.
cosigner to the account. It will also state why
the creditor is suing you and what the Filing a written answer with the court does
creditor wants out of the case. Usually, the not end the lawsuit. It just moves your case
creditor or collection agency will demand to the next stage. The court will be near your
repayment of any money owed—plus home. If you decide to represent yourself,
interest. Some complaints also ask for legal stay informed about all procedures and court
fees. The summons notifies you of the dates relating to your lawsuit. If you don’t
lawsuit and what to do in response to it. You know what to do, hire a lawyer—preferably a
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consumer rights lawyer. Call even if you have The statute of limitations helps protect
little money. You may be surprised how people from claims brought after evidence of
many lawyers will help you with unbundled a debt has disappeared. Debts older than the
services (i.e., you only pay for the help you statute limit times are often referred to as
need). The Maine State Bar Association’s time-barred debts. If a debt collector sues
Lawyer Referral Program you to collect a time-barred debt, let the
(www.mainebar.org|1-800-860-1460) and court know the debt is time-barred in your
Legal Services for the Elderly written response to the complaint. It may
(www.mainelse.org|1-800-750-5353) may be result in dismissal of the suit. If you ignore
able to provide legal help at a reduced cost. notices because the debt is old, you might
end up losing the case by default. Remember,
If you lose the case and the court grants debt doesn’t go away just because it goes past
judgment for the creditor, the creditor may the statute of limitations! The debt collector
collect on the judgment. Depending on the may have lost the legal right to sue, but they
debt and your ability to pay, they may place a can still contact you to collect on the debt.
lien on real estate, seize personal property, or
garnish part of your paycheck. If a debtor You may wonder when the clock on a debt
doesn’t have money or property to satisfy the starts to tick. It can vary, but it usually starts
debt, the judge may dismiss this “disclosure” at the date of the last payment before the
phase of the case, but the creditor or account became delinquent. Some state laws
collector can reopen the case six months later require an extra six-month window after the
to determine if the debtor’s financial account becomes delinquent. Do not confuse
situation has improved. the statute of limitations with the amount of
time a debt may remain on your credit report.
How Does Maine’s Statute of Bankruptcy, for example, will remain on your
Limitations on Debt Work? credit report for 10 years regardless of other
factors, including statute of limitations.
Debt collectors and creditors have a window
of time to sue debtors for the money and Beware of creditors or collectors trying to re-
interest owed on financial accounts. This is age old debts. They may tell you that because
the statute of limitations, and it varies state you made a small payment, a debt that was
by state. For Maine consumer debt cases, the beyond the statute of limitations has been
statute of limitations is usually six years from renewed. However, Maine law states that
the time a debtor stopped making regular acknowledging a debt or making a payment
payments. Judges may decide to use the does not renew the debt.
statute of limitations of the state where an
account is held (e.g., where the company is
located). This may result in a shorter statute
of limitations.

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 What Can You Do if a Debt Collector An online complaint form is available at
Violates the FDCPA? www.ftccomplaintassistant.gov. Consumers
may also contact the Consumer Financial
If a debt collector has violated the law, you Protection Bureau (“CFPB”). The CFPB
may have the option of suing the collector in accepts consumer complaints, working with
state or federal court. To win such a lawsuit, the consumer and collector to find a
the consumer needs to prove the debt solution. You can submit an online
collector violated the FDCPA. If the judge complaint with the CFPB at
rules for the consumer, damages will be www.consumerfinance.gov/complaint. If a
awarded. Most people who bring actions collector is violating the federal FDCPA,
against debt collectors in court are they’re probably also violating state law. The
represented by an attorney. If you plan to Bureau of Consumer Credit Protection
pursue a civil lawsuit, you will likely want to administers the Maine FDCPA. You can file
hire (or at least consult) an attorney a complaint on our website
beforehand. Some debt-related lawsuits take (www.credit.maine.gov) or call us toll-free at
years to resolve. 1-800-332-8529.

If you don’t want to hire an attorney, you Damages for FDCPA Violations
may still have the option of going to small
claims court. These courts allow consumers The FDCPA provides a range of damages
to argue their case without an attorney for successful FDCPA lawsuits. What the
representing them. It is a much faster court awards in civil damages depends on the
process than other types of courts; however, situation. Some damages are solved with a
these courts hear only limited types of cases. monetary award to the victim.
In Maine, small claims court cases cannot
involve claims of more than $6,000. Small • Damages for Physical Distress:
claims court usually involves a single hearing Sometimes debtors suffer physical
at which the parties argue their cases to the damage from the debt collection process
judge. Hearings are generally held no more (e.g., stress-related heart problems). For
than two months after the consumer files a symptoms to be allowed as evidence of
court document to begin the case. The judge harm in court, a licensed medical
may make a decision on the spot or mail the professional must document them. If
parties the ruling later. there is a provable link between the
debtor’s symptoms and the violations of
The Federal Trade Commission (“FTC”) the FDCPA, the debtor may be able to
oversees the FDCPA. The FTC monitors recover the costs of treatment and
debt collector actions and ensures that the related damages from the collector.
FDCPA is not violated. If you choose to do
so, you can file a complaint with the FTC.

8
• Damages for Emotional Distress: • Attorney Fees and Costs Recovered:
Verbal harassment and relentless calls can In cases where a debtor proves an
be a source of stress for debtors. FDCPA violation occurred, the court
Collection calls to a debtor’s friends and must allow recovery of reasonable
family can be an embarrassing invasion attorney fees and costs.
of privacy. All these things might affect
one’s emotional well-being and damage a Courts can also provide injunctive relief—
debtor’s relationships. Document every ordering the debt collector to stop certain
occurrence and discuss the situation with activities. Injunctive relief may include
an FDCPA attorney. The debt collector ordering the collector to cease all
may be held liable for causing distress. communication by telephone or ordering the
collector to stop sending collection letters to
• Lost Wages Recovered: Some debtors the debtor.
face problems at their workplace when
collectors call, disrupting their work. If a Family members, co-workers, neighbors and
debt collector violates the FDCPA by other people burdened by a debt collector’s
calling a debtor’s employer and causing communications may also sue the collector.
the debtor to lose work, the debtor may As with any FDCPA claim, these people
be able to recover lost wages. need to prove that the collector violated the
FDCPA and they suffered damages from
• Wage Garnishment Recovery: If a debt that violation.
collector violated the FDCPA by
garnishing a consumer’s salary without What Does it Mean When an
the authority to do so, the debtor may be Account is Charged Off ?
able to recover those funds.
A charge-off occurs when a creditor declares
• Statutory Damages of $1,000: The it will no longer attempt to collect a debt. It
FDCPA allows a consumer to recover up deems the account “uncollectible” and writes
to $1,000 from a creditor above other it off. However, even if a creditor charges-off
monetary compensation for physical and your debt, you still owe the debt. Creditors
emotional distress, lost wages, and the may also sell bad debt to a debt buyer, to
like. This $1,000 is per lawsuit, not per collect on it or package it for sale to another
violation. The law states that a consumer agency.
can receive up to $1,000, meaning the
amount awarded could be less. This Charge-offs may remain on a credit report
compensation can be awarded if the for seven years, even if you paid the account
consumer proves that the debt collector in full. If you pay the account, the status will
violated the FDCPA. It doesn’t matter if reflect a “paid charge-off.”
the violation caused harm.
9
 Repossessions, Foreclosures
and More

Repossessions charges imposed by the creditor. When that

time is up, the creditor has the authority to
If a borrower falls behind on a vehicle loan repossess the borrower’s vehicle.
payment, the vehicle may be repossessed.
The vehicle is collateral on the loan. If you To repossess a vehicle legally, the
don’t make your payments, the creditor can repossession must occur without the use of
seize it and sell it to recover part of their loss. force or breach of peace. After the
repossession, the repo company must notify
Ten days after missing a payment, the the consumer of where they can retrieve
creditor may send the borrower a “notice of items that were inside the vehicle. The
right to cure.” This notice states the amount creditor may keep items attached to the
needed to “cure” the default, and the last vehicle (e.g., roof racks or stereos).
date for payment without repercussions. A
notice of right to cure remains active for 12 After repossessing a vehicle, the creditor may
months from the date it was sent. If the sell it. You have the right to “redeem” your
borrower defaults again during that period, vehicle at any point before the sale occurs by
the creditor can repossess the vehicle without paying the balance owed on your loan, plus
providing a new notice. A notice is reasonable expenses incurred by the creditor.
considered delivered on the third day after it If you want to get the vehicle back, act fast
was sent in the mail. Debt collectors do not and communicate with the creditor. If you
rely on certified letters, just proof of mailing. paid 60% or more of the cash price of the
vehicle toward the loan, the creditor must
After receiving a notice of right to cure, the sell the vehicle within 90 days. If you paid
borrower has 14 days (minimum) to pay the less than 60%, the creditor can propose to
amount due in addition to delinquency keep the collateral (in writing). You can

“Some debts are fun when you are acquiring them,

but none are fun when you set on retiring them.”
-Ogden Nash
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 Repossession Calendar
1 2 3 4 5 6 7
Payment Payment May be Made Without Penalty
Missed

8 9 10 11 12 13 14
Notice of
Cure Sent

15 16 17 18 19 20 21
Notice Cure Period
Delivered

22 23 24 25 26 27 28

Cure Period

29 30
Vehicle Repossessed

either consent or object to the proposal. If preparation for sale) before applying the
you object, you can force the creditor to sell remaining funds to the consumer’s account.
the vehicle. In Maine, if the initial amount financed on
the vehicle was $2,800 or less, a creditor
A creditor planning to sell a repossessed cannot come after the consumer for unpaid
vehicle must give the debtor reasonable balance. If the sale of the vehicle brings in
notice of the time and place the vehicle will more money than needed to pay off
be publicly sold, or the date after which the expenses and debts, the creditor must return
vehicle will be sold at private auction. The the surplus to the consumer. If the initial
vehicle’s sale must be commercially loan was greater than $2,800 and the
reasonable. A low auction price may be an proceeds of the sale do not pay off the debt
indicator of, but not proof of, and expenses, the consumer is still
unreasonableness under the Uniform responsible for the remaining balance.
Commercial Code (“UCC”).

A creditor may use money from the sale of a

repossessed vehicle to cover reasonable costs
of the repossession (e.g., storage and
11
 Foreclosures the consumer may leave the property under a
“short sale” or “deed in lieu,” it will be on
Foreclosure is a court process that allows a their own schedule. If pre-foreclosure
lender to take possession of a debtor’s home, negotiations are not productive, the lender
selling it to pay off the consumer’s debts. In may file a foreclosure action in court. The
2009 the Maine Legislature enacted a law homeowner should file a written answer or
titled “An Act to Preserve Home Ownership response with the court. The paperwork
and Stabilize the Economy by Preventing served on the homeowner will include the
Unnecessary Foreclosure.” This law helps correct form and an envelope.
consumers facing foreclosure by providing
trained housing counselors to help people If the case ends up in court, the homeowner
save their homes. can request mediation through a program
run by the judicial system. If the consumer is
After a consumer misses one or more already working with a housing counselor,
mortgage payments, the lender sends a the counselor may help the consumer
notice of deficiency and right to cure to prepare for mediation. A consumer requests
the consumer. The lender also notifies the mediation by filing a written response. A
Bureau of Consumer Credit Protection. The mediator will listen to both sides and make a
Bureau then mails an informational letter to recommendation to the court. If you can’t
the consumer. The consumer has the option afford to keep the house, the mediation is a
to call the Bureau at 1-888-NO-4-CLŌZ (1- good time to explore alternatives.
888-664-2569) for referral to a counselor, or
to contact a counselor directly using the If the homeowner loses the case and the
information provided in the letter. Services court grants judgment to the lender, the
are provided at no cost to the homeowner. homeowner has a 90-day redemption period.
If they pay off the mortgage in full during
A housing counselor works with the these 90 days, they may keep the home.
consumer and the lender to find a mutually Once the redemption period expires, the
agreeable arrangement. The consumer can lender has the right to evict them.
usually stay in their home if they bring the
account current or both parties agree to the It’s important for consumers to take an
terms of a loan modification. Under such active role in the process. If you have access
agreements, a consumer usually makes to legal help, use it. If not, call our office to
reduced payments during a trial period. If the have a counselor assigned. The goal of the
trial period is successful, the creditor should program is to make sure you are treated fairly
dismiss the pending foreclosure. If the and to offer a modification if you can afford
consumer can’t afford to stay in the home a reasonable repayment plan.
under modified payments, the counselor can
help negotiate other outcomes. Even though

12
 Garnishments and Judgments the problem and don’t miss scheduled court
dates. Even if judgment has been granted,
A judgment is the official decision of a provide information to the creditor and the
court at the completion of a lawsuit. When a court if you can’t afford to pay the debt.
civil suit relates to debt, the judgment will
state how much the borrower owes. If the Title III of the federal Consumer Credit
consumer is unable to pay off their debt, the Protection Act limits the amount of money
judge may rule to enforce the judgment that can be garnished from a consumer’s
through orders to pay a certain amount paycheck. Deductions the employee is legally
weekly or monthly, or “turn- over” orders required to pay (i.e., taxes, unemployment
for personal property or bank accounts. insurance, Social Security payments) are
Judges will not order consumers to pay protected from garnishment. However,
amounts they cannot afford. If you owe deductions not required by law (i.e., health
money and can’t pay it, go to the court and insurance or union dues) are not protected.
explain why you can’t pay (e.g., loss of Federal law limits the amount of money that
employment or emergency medical may be garnished per pay period to 25% of a
expenses). If you are directed to go to court debtor’s disposable earnings or the amount
for a disclosure hearing and you fail to by which the debtor’s disposable earnings are
appear, that may be viewed as contempt of greater than 30 times the federal minimum
court, which can have serious wage—whichever is lower. This limit applies
consequences—including jail time. regardless of how many garnishment orders
an employer receives. If an employee nets
When wages are garnished, a creditor $600 a week, under the 25% formula, the
deducts money from a debtor’s paycheck. maximum garnishment would be $150 ($600
Garnishment is most often used for x .25 = $150 ). Using the minimum wage
delinquent taxes and back-owed child formula, the maximum garnishment amount
support. Wage garnishment can be is $382.50 ($600 - 30 x $7.25 = $382.5). Since
embarrassing, since it requires involvement the lesser amount is used for the maximum
by the debtor’s employer. It’s a violation of garnishment, the garnishment amount could
law for an employer to discriminate against be up to $150. These formulas do not apply
an employee due to wage garnishment. In to child support orders.
normal civil cases, garnishment can’t occur
unless the court orders a debtor to make Maine law is more protective than federal law
regular payments to a creditor and debtor on wage garnishment. In Maine, the most
fails to do so. that can be garnished from a consumer’s
wages is 25% of the debtor’s disposable
If you’re facing a court action, contact an earnings, or the amount by which the
attorney to discuss options before the debtor’s weekly disposable earnings exceed
situation escalates. Be proactive. Don’t avoid 40 times the federal hourly minimum wage -
whichever is lower.
13
Most creditors can’t get a garnishment order paying off a debt. Creditors can file liens
until they have obtained a court judgment against cars, office equipment or other
stating that a debtor owed them money. personal property, as well as homes and land.
There are a few exceptions to this rule. In Maine, the Bureau of Motor Vehicles and
Wages can be garnished without a court the Secretary of State’s Uniform Commercial
judgment for unpaid income taxes, court Code (“UCC”) division maintain records of
ordered child support, child support arrears liens.
and defaulted guaranteed student loans.
A consensual lien occurs when a consumer
Non-wage garnishment, taking funds from a agrees to have a lien placed on personal
consumer’s bank account, can also occur. If a property (e.g., a car loan) or real estate. If the
debtor is not employed but has money on borrower falls behind on payments, the
deposit, the debtor’s bank account can be creditor can repossess the vehicle. There are
frozen and tapped into by the creditor. This two types of consensual liens. In purchase-
sometimes occurs when a debtor owes money security interest liens a creditor
money to state or federal government. The extends credit to a consumer for the
government does not need a court order to purchase of property which secures the debt.
take your money. Separating exempt and In non-purchase-money security liens the
nonexempt funds and unfreezing a bank consumer volunteers property he or she
account can take weeks or months, leaving already owns as collateral for a loan.
the debtor with no access to saved money
during that period. Statutory liens enable creditors to access
consumers’ assets to satisfy a debt. One type
Liens of statutory lien is a mechanic’s lien.
Mechanic’s liens occur when a contractor or
Some debts are secured (i.e., when a creditor mechanic performs work on property and is
holds a legal interest in something of value, not paid. If they file the correct paperwork, a
called collateral, belonging to the consumer lien will attach to the property and the owner
that can be sold to pay off the consumer’s will not be able to sell the property without
debt). Others are unsecured (i.e., when the satisfying the lien.
creditor doesn’t hold an interest in property
to ensure the borrower repays a debt). Local, state or federal government can place
Secured creditors have a wider range of tax liens. Tax liens may occur in connection
remedies available to them than unsecured with unpaid property taxes, delinquent
creditors if a consumer defaults. income and estate taxes.

A real estate lien is a document filed with Judicial liens are created when a court
the Registry of Deeds. It prevents a debtor grants a creditor an interest in debtors’
from selling specific property without first property. Judgment liens can occur in a
variety of circumstances. If you lose a civil
14
action in court, the court may order current on their regular monthly payments.
placement of a lien to ensure that the Chapter 13 also protects nonexempt
creditor gets paid. This happens at a property from being seized.
disclosure hearing. At the hearing, the
owing party must disclose any assets that Information about Chapter 7 and Chapter
could be used to pay the judgment. If the 13 bankruptcy remains on consumers’ credit
court determines that the debtor is able to reports for ten years. The damage done by
pay, the judge can order garnishment of filing for bankruptcy depends on the
wages, seizure of bank accounts or condition of a consumer’s credit.
placement of liens against the debtor’s Consumers with poor credit aren’t likely to
property. Monetary judgments filed in the see significant drops in their credit scores.
Registry of Deeds act as liens on all real Consumers with good credit, however, may
property in a county, without a court order. see their credit scores fall several hundred
points.
A creditor cannot take everything you own
to pay off a debt—the law allows certain Bankruptcy is not a remedy for all financial
exemptions. To learn about exemptions, talk issues. It doesn’t eliminate secured debts,
to a lawyer, a legal aid clinic or a civil clerk and cannot prevent creditors from
at a courthouse. repossessing property. It will never remove
child support or alimony obligations, and
Bankruptcy rarely erases student loan debt. Eliminating
tax debt through bankruptcy is not simple.
Consumers facing serious debt problems Filing for bankruptcy will not wipe out non-
may find filing for bankruptcy a necessary dischargeable debts. If you file for Chapter
remedy. If the amount of debt is 7, these debts will remain when your case is
manageable, you should try to pay it off. over. If you file for Chapter 13, these debts
Most consumers have access to two types of will have to be paid in full during your
bankruptcy. In Chapter 7 bankruptcy, a repayment plan.
bankruptcy trustee cancels many (or all) of a
consumer’s debts. The trustee may
liquidate (sell) some of the consumer’s
property to repay their creditors. In
Chapter 13 bankruptcy, the consumer
keeps their property but pays back some or
all of their debts over a three to five-year
period. Only Chapter 13 bankruptcy can
stop a mortgage foreclosure. Chapter 13
bankruptcy allows debtors to catch up on
missed payments over time while staying

15
 Debt Collection Scams

Have you gotten a call from a person saying 3. Harassment—sometimes calling a dozen
you owe money and need to pay up on an or more times in one day or using
account you don’t owe? If so, you may have profane and hostile language.
been the victim of a debt collection scam.
Since the summer of 2014, the Bureau of 4. Refusing to provide the company’s
Consumer Credit Protection has gotten address, the caller’s direct dial number,
many reports from consumers about and their supervisor’s name and phone
receiving these disturbing calls at their homes number.
and workplaces.
5. Insisting that funds be “wired” through
Debt collection scams often begin as online Western Union or MoneyGram, or
payday loans and other unlicensed short- demanding a prepaid debit/money
term credit products. Whether or not the transmission card and refusing to accept
consumer takes out a loan, collectors may a mailed check. They sometimes ask for
call a few months later demanding personal bank account information (e.g.,
repayment. The victim is often pressured to routing number and/or account number)
pay off the “debt” before it gets worse. The to illegally debit funds from the account.
con artists are sometimes convincing enough
to make consumers wonder if someone has 6. Refusing to provide a Maine debt
taken out loans using their name. If the collection license number, or saying they
victim has outstanding debts, the collectors don’t need one to collect your debt.
may inflate the amount owed, claiming
interest and fees caused the loan’s principal 7. Contacting your friends, relatives or co-
to increase. Unlicensed debt collectors have workers, telling them of the existence of
no authority to collect money, even if the this “debt,” and claiming you are in
debt is legitimate. Here are a few tactics used serious trouble.
by fake debt collectors:

1. Threatening immediate arrest or service

of court papers.

2. Refusing to mail written validation of the

debt.

16
Each of the above seven examples is a Phantom Debts
serious violation of the federal Fair Debt
Collection Practices Act (FDCPA)—which Phantom debts, a/k/a zombie debts, are
can land debt collectors in trouble with old debts that have come back to haunt
regulators in both the state and federal (presumed) debtors. Some phantom debts are
government. based on actual debt: very old debts paid in
full, settled for less than the full amount, or
Licensed collectors should: outstanding past Maine’s six-year statute of
limitations on consumer debt. Other
• Act politely and respectfully; phantom debts are scams: phony collectors
• Offer to mail you evidence of debt if you threatening or harassing people over debts
ask for written validation; that never existed. In some cases, phantom
• Accept checks in payment of the debt; debts may be actual debts, but debts you do
• Work with you in good faith to set up a not owe. Examples might include debts
reasonable repayment plan; and incurred by relatives, previous residents of
your home, or people with names similar to
• Provide their address, telephone number,
yours.
and Maine license number.

If you’re contacted about a phantom debt,

Phony debt collectors do not care about the
don’t disregard it out of hand. Ask the
FDCPA, just like burglars doesn’t care if you
collector—in writing—to send you written
have locks on your doors! Scam collectors
validation of the debt from the original
bully consumers into wiring funds. Once
creditor. If you don’t owe it, don’t pay it. See
wired, the money is gone. There is almost no
also Statute of Limitations (pg. 7).
chance of recovering it. Even worse,
consumers who wire funds to pay non-
existent debts often have their names added
to suckers lists. Scammer may sell these lists
to other criminals, who call knowing you
already caved and sent funds when pressured.
Before sending money, call the Bureau of
Consumer Credit Protection (1-800-332-
8529) to determine if a debt collector is
licensed!

17
 Glossary of Debt Collection
and Credit Terms

Accounts Receivables: Money owed to a business Bankruptcy, Chapter 13: A federal court action
for merchandise or services sold. allowing protecting some property from while debts
are being reorganized.
Accrued Interest: Interest that has accumulated since
the most recent payment on a debt. Capitalization (of Interest): The addition of unpaid
interest to the principal balance of a loan.
Alimony: A court-ordered action related to financial
support offered to another partner in a situation Cease Letter: A formal letter to a debt collector
involving divorce or separation. asking that collection contact be stopped.

Amortization: The liquidation of debt by installment Charge-Off: An accounting practice in which a

payments creditor declares that a debt is unlikely to be collected.

Annual Percentage Rate (APR): The total cost of Civil Action: A court action against a consumer.
credit expressed in a yearly percentage rate. The APR
includes non-interest charges such as fees and Closed-End Credit: Generally, credit extended in a
mortgage points. specific amount for a specific purpose, to be repaid in
installments over a specific period of time (e.g., a
Arbitration: The resolution of debt involving a 3rd mortgage loan)
party.
Collateral: A borrower’s pledge of property in order
Automatic Stay: An injunction that stops lawsuits, to secure credit.
garnishments and foreclosures on the date a
bankruptcy petition is formally filed. Collection Agency: A third party entity that attempts
to collect on a consumer debt. Collection agencies
Balloon Payment: A large payment due at maturity may act as the agent of the original creditor, or may
on a non-amortizing loan. own debt by purchasing it from another creditor.

Bankruptcy, Chapter 7: A federal court action Commercially Reasonable Sale: The sale of a
allowing debtors to liquidate assets in order to satisfy repossessed vehicle is considered commercially
creditors. reasonable if the vehicle is auctioned or sold under
normal circumstances in a recognized market.
Bankruptcy, Chapter 11: A federal court action
allowing business debtors to attempt reorganization. Compound Interest: Interest charged on both the
principal balance of a loan and previously accrued
interest.
18
Consensual Lien: When a consumer voluntarily Deed in Lieu of Foreclosure: An agreement to
consents to placement of a lien on personal property transfer property to a lender instead of the lender
or real estate. proceeding with a foreclosure action.

Consumer Reporting Agency: See Credit Default: The failure of a debtor to make timely
Reporting Agency. payments to a creditor.

Contempt of Court: Behavior that opposes or defies Default Judgment: A binding judgment in favor of a
the authority, justice, and dignity of the court (e.g.,
failure to appear in court). party based on the failure to take action by a second
party. In debt collection, this may occur if a debtor is
summonsed to court but fails to appear.
Credit Bureau: See Consumer Reporting Agency.

Deferred Payment Date: When a lender agrees to let

Credit Report: A detailed record of a consumer’s
the consumer make a payment (mortgage, auto, credit
credit history prepared by a consumer reporting
card) after the scheduled payment day.
agency.

Deficiency Balance: The remaining amount of

Credit Reporting Agency: Any person or company
monies owed to a lender after repossessed or
that engages in the practice of assembling or
foreclosed property is sold at an auction.
evaluating consumer credit information or other
information on consumer for the purpose of
furnishing consumer reports to third parties. Delinquency: Failure to make a payment on an
obligation when due.
Credit Score: A statistically-derived representation of
a consumer’s creditworthiness expressed as a number Disbursement: Loan proceeds paid to a borrower.
between 300 and 850. The higher a consumer’s credit
score, the greater their perceived creditworthiness. Discharge: An order given by a bankruptcy judge
that pardons or extinguishes the remaining debts owed
Debt Load: The total amount a debtor owes. by the borrower.

Debt Settlement: When a borrower (or a hired agent Disclosure Hearing: A hearing at which the owing
of a borrower) negotiates with one or more creditors party will be required to disclose any assets that could
to lower APRs or the current loan’s balance. be used to pay the judgment amount.

Debt-to-Asset Ratio: An indicator of financial Finance Charge: Any fee representing the cost of
leverage calculated as a borrower’s total debts divided credit.
by the borrower’s total assets.
Forbearance Agreement: A negotiated act of
Debt-to-Income Ratio: A fractional number used by restraint by the lender to refrain from foreclosure in
lenders to gauge risk by dividing monthly debts by exchange for an agreement with the borrower to bring
monthly income. Lenders use two types of ratios: the the debt current.
front-end ratio includes the total housing payment of
principal, interest, taxes and insurance; the back-end Foreclosure: The legal process of obtaining and
ratio includes the total housing payment and all other selling a mortgaged property to recover the unpaid
debts. debt owed to the lender following default of the note
by the borrower.

19
Grace Period: The period of time between the Past-Due Amount: The dollar amount a borrower is
monthly payment due date and the date by which a behind on a loan account.
late fee may be assessed. Maine law provides a grace
period of 15 days before a creditor can charge a late Petition: In bankruptcy case, a document that
fee. initiates the bankruptcy process.

Judgment: A court decision against a debtor. Phantom Debt: An old debt that has come back to
haunt a (presumed) debtor.
Judicial Lien: Occurs when a judge grants a creditor
a lien, or interest, in a debtor’s property, which can be Post-Dated Check: A check that will not be drawn
taken as repayment if a debt is not paid. from an account until the future date written on the
check by the user.
Late Fee: A fee imposed by a lender for payments
made after a set periodic due date. Principal Balance: The non-interest amount owed
on a loan.
Lien: A form of security interest granted over
property to secure the repayment of a debt. The word Purchase-Money Security Interest Lien: A
lien means literally, “to bind.” subcategory of consensual liens occurring when a
creditor extends credit to a debtor specifically for the
Mechanic’s Lien: A lien that arises when a purchase of the property that secures the debt (e.g., a
contractor or mechanic performs work on property mortgage loan).
and is not paid. Owners of the property cannot sell it
until the debt is paid off. Real Estate Lien: A document filed in the Registry
of Deeds preventing a consumer from selling their
Negative Amortization: When scheduled monthly land or residence without first paying the amount of
payments are insufficient to satisfy the monthly money listed on the lien.
accrued interest and reduce the principal balance.
Negative amortization results in the form of a Remittance Report: A document sent from a debt
growing loan balance as opposed to a declining loan collector to a creditor showing the amount of funds
balance. collected on assigned accounts.

Negative Equity: When a borrower owes more Repossession: The act of taking back an item
money on a secured loan than the collateral will be pledged as collateral on a loan.
worth when sold.
Right of Rescission: A consumer right provided by
Non Purchase-Money Security Interest Liens A the Truth-in-Lending Act (REG Z) that allows
subcategory of consensual lien occurring when a borrowers a three day “cooling off period” during
creditor extends credit to a debtor who volunteers which they are able to rescind or cancel a loan
property as collateral. transaction in cases where an interest in land is
conveyed other than a purchase money mortgage.
Open-End Credit: A pre-approved loan account that There is no right of rescission for auto purchases.
may be drawn upon up to a set limit and that can
subsequently be paid back prior to payment becoming Right-to-Cure Notice: A notice, from a creditor to a
due. borrower, notifying the borrower that they have
missed a payment and informing them that the

20
creditor may exercise their rights under the law,
including repossession or the start of foreclosure,
unless payment of all past-due amounts is made by a Time-Barred Debt: A debt that has passed the time
specified date. Right-to-cure notices remain effective threshold set by the Statute of Limitations.
for 12 months after the original date sent.
Total of Payments: The total amount paid back on a
Satisfied: A court ordered payment on a debt which loan, including interest and other charges.
has been paid off by the consumer in an amount that
is deemed to be acceptable.
Unbundled Services: Attorney services that only
require the consumer to pay for legal assistance
Secured Loan: Loans in which a security interest in actually needed.
property is pledged.
Unsecured Loan: A loan where no collateral is
Service of Process: When a debtor is formally served pledged.
by a deputy sheriff or other person of authority to
appear in court for an overdue debt obligation.
Upside Down (Equity): When a consumer owes
more on property than the property’s appraised value.
Set-Off/Off-Set: A contractual right a bank or credit
union has to remove funds from a consumer/
Wage Garnishment: A court order to legally have a
member’s bank account to pay a past due loan amount
portion of a debtor’s wages directed toward an
at that same financial institution.
outstanding debt.

Short Sale: When a agrees to permit a borrower to

Writ of Replevin: Court ordered repossession of an
sell property securing a loan for an amount that is
item offered by a borrower as security on a loan.
insufficient to pay off balance of the loan.

Zombie Debt: See Phantom Debt.

Skip Tracing: An investigative tool used by debt
collectors to find the new address and contact
information of delinquent debtors that have moved
without leaving forwarding addresses.

Simple Interest: An interest calculation based solely

on the original loan amount.

Statute of Limitations: The maximum period of time

parties have to initiate legal proceedings.

Statutory Lien: A lien enabling creditors to access a

consumer’s assets to satisfy a debt without the consent
of the borrower.

Tax Lien: A legal claim on property for unpaid taxes.

Term: The payback period of a loan.

21
 Cease Contact and Other
Sample Letters

Consumers have the right to demand that a debt collector stop communicating with them. To
accomplish this, a letter must be sent to the collection agency requesting all calls and/or mail
communications to be stopped. There are other letters that a consumer may want to send to
collection agencies, including letters to inform collectors that you have legal representation
which require a collector to only make contact through your attorney, or that you are
requesting that a debt be validated. You may also wish to use a letter to dispute the validity of a
debt. Some examples of how these letters should look are on the following pages.

NOTE: The “Cease Communications” letter found on page 23 is not a cure-all. Some
collectors who receive this letter will immediately cease collection due to the small size of the
debt owed, or the fact they may have a hard time providing written validation of the debt.
Some collectors will do the opposite, escalating the situation and hiring an attorney to take you
to court.

22
 Cease Communications Sample Letter

Debt Collector Name

Address Line 1
Address Line 2

RE: Account number: _____________________

Original Creditor: _____________________

Dear ________________________________:

Per my rights under the federal and state Fair Debt Collection Practices Act (USC §1692 et seq., Section 805 c,
Title 32 MRS §11001 et seq.), I am instructing your company, in writing, to cease its collection effort – by personal
land-line and cellular telephone, correspondence, in-person meetings and any other forms of communications –
with myself (my location information is contained in this letter), my relatives, my friends and my co-workers at my
place of employment.

Please be advised that this is my formal FDCPA “Cease Communication” letter to you, and with this letter in
place, I reserve the right to explore any available damages that the FDCPA provides to me, as a consumer, if your
company continues collections communications with me about the above referenced account.

Please be advised that I am now keeping accurate records which may include: telephone logs, recorded telephone
conversations, emails and general correspondence—and those dates received, to ensure an accurate accounting of
the debt collection actions by your company in the post “Cease Collection” time period.

You may contact me by written correspondence once, as permitted by law, to tell me that you are ceasing
collection communications on this account.

Sincerely,

___________________________

23
 Debt Validation Sample Letter

Debt Collector Name

Address Line 1
Address Line 2

RE: Account number: _____________________

Original Creditor: _____________________

Dear ________________________________:

I am sending this letter to you in response to a notice I received from you on (date of letter). Be advised, this is not a
refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b)
that your claim is disputed and validation is requested.

This is not a request for "verification" or proof of my mailing address, but a request for validation made pursuant
to the above named Title and Section. I respectfully request that your office provide me with competent evidence
that I have any legal obligation to pay you. Please provide me with the following:

• What the money you say I owe is for;

• Explain and show me how you calculated what you say I owe;
• Provide me with copies of any papers that show I agreed to pay what you say I owe;
• Provide a verification or copy of any judgment if applicable;
• Identify the original creditor;
• Prove the Statute of Limitations has not expired on this account;
• Show me that you are licensed to collect in my state and provide me with your license numbers and
Registered Agent.

I have asked for this information because I have some questions. I need to hear from you to make an informed
decision about your claim that I owe this money. I am open to communicating with you for this purpose. In order
to make sure that I am not put at any disadvantage, in the meantime please treat this debt as being in dispute and
under discussion.

In addition to providing the information requested above, please let me know whether you are prepared to accept
less than the balance you are claiming is owed. If so, please tell me in writing your offer with the amount you will
accept to fully resolve the account between us.

Sincerely,

______________________________

24
 Communication through a Lawyer Sample Letter
Debt Collector Name
Address Line 1
Address Line 2

RE: Account number: _____________________

Original Creditor: _____________________

Dear ________________________________:

I am responding to your contact about collecting a debt. You contacted me by [phone/mail] on [date] and
identified the debt as [any information they gave you about the debt].

Please contact my lawyer about this debt, and do not contact me directly again. My lawyer’s contact information is:

[Contact information for your lawyer].

Thank you for your cooperation.

Sincerely,

___________________________

25
 Disputing a Debt Sample Letter
Debt Collector Name
Address Line 1
Address Line 2

RE: Account number: _____________________

Original Creditor: _____________________

Dear ________________________________:

I am responding to your contact about collecting a debt. You contacted me by [phone/mail], on [date] and identified
the debt as [any information they gave you about the debt]. I do not have any responsibility for the debt you’re trying to
collect.

If you have good reason to believe that I am responsible for this debt, mail me the documents that make you
believe that. Stop all other communication with me and with this address, and record that I dispute having any
obligation for this debt. If you stop your collection of this debt, and forward or return it to another company,
please indicate to them that it is disputed. If you report it to a credit bureau (or have already done so), also report
that the debt is disputed.

Thank you for your cooperation.

Sincerely,

______________________________

26
 Publications
Be sure to check out other free booklets from the
Bureau of Consumer Credit Protection:

Downeaster Common Sense Guide: Credit Cards—Paper or Plastic? – This

comprehensive booklet addresses credit cards: how they work, their responsible
use, how to comparison shop for a credit card, when to pay cash, use a debit card
charge on a credit card and what to do if you fall behind on your credit card
payments.

Downeaster Common Sense Guide: Automobile Buying and Financing –

From calculating “how much vehicle” you can afford, to vehicle research,
shopping for the best APR and deciding on the best loan term for your needs, this
booklet is a comprehensive guide to purchasing and financing a vehicle.

Downeaster Common Sense Guide: Gone Phishing – Identifying and

Avoiding Consumer Scams – This guide is all about helping consumers defend
themselves against being scammed. It details tactics and hooks used by scammers,
offers advice to consumers so they can protect themselves, and explains how to
report the scams to authorities.

Downeaster Common Sense Guide: Credit Reports and Credit Scores –

Learn the basics of credit, gain insight into how credit reporting and scoring work,
and discover the impact your credit has on your ability to borrow with this
publication from the Bureau of Consumer Credit Protection.

These guides are free to Maine residents. Out-of-state orders are $6.00 each, or at
a volume discount of $4.00/copy on orders of 50 or more (shipping included).

To order, call 1-800-332-8529 (in-state) or 1-207-624-8527 (outside of

Maine).
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 NOTES

28
NOTES

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 NOTES

This book is not intended to be a complete discussion of all statutes applicable to consumer credit. If you require
further information, consider contacting our agency or an attorney for additional help.
4th Printing (December 2017) | Copyright © 2015, State of Maine Bureau of Consumer Credit Protection

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 Consumer Protection Resources
1-800-332-8529
Maine Bureau of Consumer Credit Protection
TTY Maine Relay 711
1-800-300-5000
Maine Bureau of Insurance
TTY Maine Relay 711
1-800-965-5235
Maine Bureau of Financial Institutions
TTY Maine Relay 711
1-800-262-2232
Maine Office of Aging and Disability Services
TTY Maine Relay 711
1-800-436-2131
Maine Office of the Attorney General (Consumer Hotline)
TTY 1-207-626-8865
1-207-624-8603
Maine Office of Professional and Occupational Regulation
TTY Maine Relay 711
1-877-624-8551
Maine Office of Securities
TTY Maine Relay 711
1-800-452-4699
Maine Public Utilities Commission (Consumer Assistance Division)
TTY 1-800-437-1220
1-207-624-8524
Maine Real Estate Commission
TTY Maine Relay 711
Commodity Futures Trading Commission 1-866-366-2382
1-855-411-2372
Consumer Financial Protection Bureau (CFPB)
TTY 1-202-435-9742
Federal Reserve Consumer Hotline 1-888-851-1920
Federal Trade Commission Consumer Response Center 1-877-382-4357
Federal Trade Commission ID Theft Hotline 1-877-438-4338
(after dialing, press “0” to reach a live operator)
Financial Industry Regulatory Authority (FINRA) Call Center 1-301-590-6500
Internet Crime Complaint Center (IC3) www.ic3.gov
National Credit Union Administration (NCUA) 1-800-755-1030
U.S. Department of Veterans Affairs 1-800-729-5772
U.S. Postal Inspection Office — Portland, ME Field Office 1-877-876-2455

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 Bureau of Consumer Credit Protection
35 State House Station | Augusta, ME 04333-0035
www.Credit.Maine.gov

Interested in a digital copy of this guide or other Bureau booklets? Scan to visit the Bureau’s
publications page. Mobile data rates may apply.
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