Under Federal Law, a collection agency or debt collector can only withdraw money from your bank account if it obtains a judgment against you. Then, and only then, can the collection agency place a garnishment on your bank account. The garnishment process varies from state to state.

Can you challenge a collection agency?

No, if you dispute the debt in writing within 30 days of the initial communication the debt collector must stop all collection activity until it provides the required verification. All debt collectors must follow the Fair Debt Collection Practices Act (FDCPA). This can include lawyers who collect rent for landlords.

Can a collection agency take a person to court?

If you refuse, your creditor returns to court and obtains a judgment execution order that allows it to seize debt by force. A collection agency with an execution order is a dangerous adversary.

What can I do if I owe money to a collection agency?

If you have money that can go towards paying off the debt, you can apply to pay it off in instalments. This is through an Instalment Order, and you will need to complete court form N245 to apply. If you don’t agree that you owe the debt, you can apply to have the judgment rejected, or ‘set aside’.

What to expect if a debt collector takes you to court?

You will need to show the judge your paperwork on the account or documents from the collection agency with the date of the debt and the name of the original creditor. If the debt is collectible. If you feel that the debt is valid, it could still be worth it to appear in court.

Where do I report a debt collector for an alleged violation?

Where do I report a debt collector for an alleged violation? Report any problems you have with a debt collector to: your state attorney general’s office; the Federal Trade Commission; the Consumer Financial Protection Bureau; Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act.