Why Seniors Shouldn’t Worry about Debt Collectors

Hi, I'm Jeff Hoyt, Editor-in-Chief of SeniorLiving.org. If you don't pay your bills, you could hear from a debt collector. But today, you're going to hear from attorney Eric Olson, who's going to tell us why seniors shouldn't have to worry about debt collectors. Now, Eric is an expert on this topic, as he's the founder of the HELPS nonprofit law firm, which serves senior citizens, veterans, and disabled persons struggling with debt. Based on his vast experience and knowledge, Eric will reveal the laws that debt collectors must follow, how to make them prove that the debt is real, how to get them to stop calling, why sending them even $1 can be a bad idea, why you shouldn't worry about getting sued, and how his law firm can help. As Eric is in Salem, Oregon, and I'm in Los Angeles, we'll be conducting the interview online via Zoom. Hi, it's Jeff Hoyt, Editor-in-Chief of SeniorLiving.org. And once again, it's my pleasure to be speaking with attorney Eric Olson. Eric is the founder and Executive Director of the HELPS nonprofit law firm that helps seniors and other people struggling with debt. Hi, Eric, how are you? Really good, Jeff. Really good. Good to hear. So people are struggling with debt, and they don't pay off their debts. Eventually, they may be contacted by a debt collector. So I want to talk to you about that. But first off, is debt really that big an issue with American seniors today? Absolutely. Statistically, almost half of seniors have incomes within 200% of the poverty line. And they end up, they owe more debt than ever before. The 200% are classified as economically vulnerable. Yeah, it is a big problem. And it's getting bigger all the time. So if a senior does have consumer debt, credit card debt, medical debt, auto loan, they don't pay off, what happens when they don't pay their debt? Well, if they don't pay their debt, first off, what's going to happen is the original creditor is going to call them. Like the credit card company is going to call them. You know, maybe the doctor office will call them. And if they can't pay it, or they're late in paying it, or eventually, they're going to turn it over to a debt collector, a collection agency that's going to collect on behalf of the original creditor. And are there rules that this debt collector is supposed to follow? There are. There's a lot of rules that debt collectors are supposed to follow in trying to collect the debt. Such as what time of day they can call, who they can contact? Yeah, I'll say, yeah, there's, there's, it's called the Fair Debt Collection Practices Act is, governs what debt collectors can do and what they can't do in trying to collect the debt. They can't harass or they can't abuse when they make calls. They can't make, they can't lie. They can't make false misrepresentations. They can't call before 8am or after 9pm. There's certain restrictions on days they can call and Sundays they can't communicate. There's, but, you know, it kind of depends on who the debt collector is. You've got all kinds of debt collectors. You've got debt collectors for payday loans. You've got debt collectors for high interest loan outfits. Then you have debt collectors for doctor bills. And you have debt collectors for credit cards. So there's, they're not all the same. And some of them are a lot more aggressive than other ones. I think one thing seniors can count on, a debt collector will never tell a senior about their rights, which is very important for seniors to know. And how is it different when a senior owes debt as opposed to a younger person? Good question. And it's really the key to this. You know, when we're younger and we have a job and if we owe debt, we're worried that we could get sued and someone could garnish our wages. Okay. And that can be scary for a person that's, you know, employed and has a family or whatever. But the laws and the rules completely change when a senior retires. When they're starting to get social security, a pension, if they're getting disability, if they're getting VA benefits, it's not the same. They're not in the same world when it comes to debt collectors. It's completely different. So if I get a call about a debt, how do I know it's real? How do I know I'm paying off the right person? Is there a way to get the debt verified? So Jeff, the rules for seniors, the laws for seniors are completely different. And a lot of seniors don't know that. And that's the most important thing they need to understand. And I'll explain that. Seniors need to understand that their retirement income, their social security, their pension, their disability, their VA benefits is protected by federal and state laws. It can't be garnished or taken from them. Okay. Whereas if they had wages when they were younger, it could be garnered. They could have something to fear about. But when they're older and they're on this protected income, a debt collector, if they were to sue, whatever, they can't take the money from them. So in a lot of ways, seniors don't have to fear debt collectors if they call. They don't have to fear them because it's kind of like a hollow remedy for a debt collector. But now a debt collector will never tell a senior this, that their income is protected or their rights. They just won't. Debt collectors, whoever they are, most of them are paid on a commission basis. And they kind of, they're aggressive. They bend the law sometimes to, even though the law dictates what they can do, a lot of them stretch it. There was an article in Time Magazine a few years ago. And I'll never forget it. Debt collectors talked about how often they're sued under the Fair Debt Collection Practices Act for violating the law. And the guy was honest. He said, well, you know, yeah, we do it all the time because it's effective. And if we lose our lawsuit and have to pay a little bit of money, it's just a cost of doing business. And so the amount that a person, they could be hurt is, hasn't really changed over the years. So a lot of them, you know, some of them are, can engage in tactics that quite aren't legal. But a senior needs to know their income is protected. And they don't need to talk to a collector if they don't want them. They don't need to pick up the phone. They don't need to talk to them. But if they do talk to them, there are rules that apply. So there are rules, the law that apply to the debt collectors, and some of them are more aggressive than others, like you said. But what about the person owes the money? It's like, are there certain things they should never do when dealing with a debt collector? There's a statute of limitations, okay? So if I have a credit card debt and I stop paying it, the creditor legally has a certain amount of time to collect on that debt or file a lawsuit to collect on that debt. Often, and it depends on the state. Commonly, it could be six years. It might be four years. Sometimes it's even less. They have to take a lawsuit to establish that you owe the debt within that period of time. But most of the time in most states, if you make a payment towards that debt, it sets the clock up. Like if you pay it, if it's a six-year statute of limitations, you pay it and you make a payment and there's only a year left, then boy, the collector has another six years to try to collect on the debt. So yeah, you need to be careful if a statute of limitations is going to run, you know, whether you should make a payment or not. You've got to realize that when you talk to a debt collector, that they can be pretty aggressive. You can cut off the communication. And then if you don't want to get the communication anymore, the Fair Debt Collection Practices Act provides it. You can send a letter to that debt collector and it's called a cease and desist letter, which tells the debt collector that you don't want them to communicate with you anymore by phone or mail, okay? And you can send that, you can send it by regular mail, you can send it by certified mail or both. And debt collectors, legitimate debt collectors, know when they get a cease and desist letter, they can't call you anymore and they cannot send you a demand letter. They have to leave you alone. Now, they could sue you, but that's usually no big deal because your income is safe. But you can stop the debt collector in their tracks by sending them a cease and desist letter. But once again, if you insist on talking to them, you have to realize that, you know, there's certain things a debt collector has to, you know, has to comply with. For example, if you got a debt collector called you and you didn't know who it was about, they have to identify who they are and what the debt is and you can write them a letter. And they have 30 days to tell you where the debt came from, who the original creditor is, and give you the complete information. And during that 30 days under the law, they're supposed to stop collection action during that 30 days. So you can ask them for proof that you owe the debt and where it came from. A lot of times seniors get calls from people and they don't have the faintest idea what the debt is about. You have a right to ask for it. Once again, seniors should know that there's a lot of scam collectors out there. Okay. I don't know where they get this, but they find out that someone might be susceptible to intimidation. Okay. And so maybe they sell these names and you get people calling. Maybe they know about a debt you had years ago and then they'll call you about it and then try to intimidate seniors. The senior should know that their income is protected. They don't need to talk to this person. They can hang up the phone. Hope that covers on that part. Great. So to be clear, anyone of any age can get sued. It's just that someone's not going to take the time and effort and money to file a lawsuit against a senior if they know they don't have any other income except for their income that's protected, their social security, their pensions and whatnot. Yeah. Yes and no. Okay. There's a lot of, I mean, if a senior had like 10 credit cards, okay, let's say for 10 different companies, maybe 1.5 or maybe 1.5 out of the 10 might file a lawsuit. Okay. There's some debt collectors, some credit card companies more likely to sue than others. And a lot of times I think they sue just to, it's scary to get a lawsuit and it can be intimidating. If a debtor doesn't know their income's protected or that it's safe, they might be, you know, they might choose to pay the debt because they don't think they have any other choice. They don't realize that nothing can be taken from them. So no, they still can be sued. But it's a lot of debt collectors, I think, realize that if they sue a senior, they're not going to get anything. So a senior might be less likely to be sued than a person who has a job that's younger. Thanks for clarifying that. So a senior who gets a call from a debt collector certainly has the right to say, hey, put it in writing, let me know who I owe, whatever. They should admit nothing on the phone, but they can certainly ask for the information, correct? They can ask for it. They have to make that request in writing, okay, and send it to them. And get the address and send it to them. They can send it by regular mail or certified mail or both. And the collector has 30 days to get them that information. Right, and a legitimate collector would give this address over the phone. In other words, I wouldn't know if I got a call from someone what their address is unless they tell it to me. Good question, yeah. I talked to a lot of people and who talked to debt collectors who won't identify who they are. I think they just call to try to shake someone down, intimidate and scare them to pay something when they're really not legitimate. And are there requests for being paid in Bitcoin or iTunes gift cards or things like that from illegitimate debt collectors as well? You know, I haven't heard that happening, but it does happen. But no, I don't see that happen with seniors. There are seniors that take advantage of or scammed for different things, but that's not debt collectors are doing that. Those are scammers. Yeah, I was referring to like a scam debt collector. But if the debt is legit, you can ask them to give their address. You'd write them a letter saying, how much do I owe? Who do I owe it to? And they would have 30 days to respond. Yeah, they have to validate the debt. They have to validate it. Yeah, they have to validate it, say who they got it from and who the money was originally owed to. They have to give you the information so you know if you legitimately owe that bill. And then if your income is protected, as a senior, you can decide, hey, I'm not going to bother responding and they can sue you. But you said, you know, it could happen, but the odds are low. It depends who the creditor is. Yeah, it depends. But once again, even if you're sued, that's no big deal. They can't collect from you. They can't touch your social security. They can't touch your pension. As we've talked before on this channel, seniors income in their bank account from federal sources is protected automatically by banks up to twice the amount of your federal benefit you receive each month is protected automatically from garnishment. So yeah, seniors don't need to worry and they're unlikely to be sued. And if they are, normally there wouldn't be any issues that would cause them any problems. But it can be scary. It can be scary. That's true. And so if they do get the debt validated, they can decide to pay it. Or if they decide not to pay it and they keep getting bothered with phone calls, they can send a cease and desist letter to say, don't contact me anymore. Or they can do that at the beginning if they want. And where can seniors get a copy of a cease and desist letter? They can just Google cease and desist letter on the internet and they'll probably come up innumerable templates. We've got some on our website, but there's a lot of... If they search on the internet, they'll easily find a copy or a template of a cease and desist letter they can send. All right. And there's one on the HELPS website as well. Oh, yeah. Yeah, we've got one and we give to people if they like it. Yeah, you bet. And how else can the HELPS non-profit law firm help people who are struggling with debt who are being pounded by debt collectors? Okay. So what HELPS is, we're a 501c charity, non-profit law firm. We help seniors in all 50 states nationwide. We protect seniors from debt collector harassment under this federal law that we talked about, this Fair Debt Collection Practices Act. One of the provisions is if someone's represented by an attorney, debt collectors can no longer call or send letters to that person anymore. And so what HELPS does is people contact us, they enroll in HELPS, we send a cease and desist letter to the people they owe money to, tell them to leave them alone. And then we represent the seniors or disabled person ongoing so they have an attorney literally forever so they never have to deal with debt collectors again. And so if they ever have a question or concern or worry, they can always pick up the phone and call us. If they got a new debt collection demand letter or call, if they got a call, they would refer them to HELPS, say, hey, contact my attorney HELPS, you can no longer legally contact me. And then you hang up the phone and then you give us who the new contact was. We'll send them a cease and desist letter and they'll leave them alone. But the most important thing that I guess I think that we do is that we protect the seniors ongoing. And then we also educate the seniors on how they can maintain their financial independence, what they can do so that they can live within their means and how they can protect themselves so they don't have to worry about the collectors but also have enough money to provide for their basic needs. Great. And you mentioned the cease and desist letters also available on your website. What is the website and how can people contact HELPS? Well, we're all over the internet. It's www.HELPSisHere.org, H-E-L-P-S-I-S-H-E-R-E.org. Or they can just type in HELPS Nonprofit Law Firm. Now HELPS has an S on it and it stands for HELP Eliminate Legal Problems for Seniors, HELPS. And yeah, they can call us on the phone with questions. It's toll free 855-HELPS-US or HELPS-US. Either one will get to us. Well, I really appreciate you taking the time and hopefully this helps a few seniors who are struggling with debt and how they can combat these debt collectors. I do too. I think just the most important thing a senior need to realize is that their income is safe and protected and that a debt collector really can't really do anything to them. They can scare and intimidate them and then they don't need to communicate with them if they don't want to. Great. Thanks for taking the time, Eric. You bet, Jeff.