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Debt Collection Overview

Managing Debt. Cease letters. What To Do If a Creditor Sues You for Debt. Protecting Your Rights.

Managing Debt

Managing substantial debt can be difficult, time consuming, confusing, and very frustrating but don’t give up! The debts won’t disappear by themselves; ignoring them will only make your situation worse. Help is available.

GreenPath Debt Solutions is a New Hampshire non-profit that provides free debt counseling to help eliminate credit card debt. They also help people with student loan debt, and avoid foreclosure, among other debt issues.

How To Get Out of Debt from the Federal Trade Commission’s website for consumers covers managing debt, credit repair, debt settlement, debt consolidation loans, and more. It also contains a simple worksheet for making a budget.

Credit reports are an important part of managing your debt. What do you know about them?

Check out our “Credit Reports” page for more information.

Always pay your most important bills first

If you cannot pay all of your bills, you have to decide which bills to pay first. The most important bills are the bills with the worst consequences if they are not paid.

Rent or mortgage payments on your home, continued utility service, and food are your basic necessities. These are your most important bills and should be paid first.

Your car loan is an important bill to pay. If you get too far behind on your car loan, the bank will repossess your car (read our Auto Repossession article).

Credit cards, personal loans, and medical bills are the lowest priority for repayment.

What will happen if I do not pay my bills?

If you know you will not be able to pay a bill, you may call the creditor before missing the monthly payment and try to work out a repayment plan that you can afford. GreenPath Debt Solutions — a New Hampshire non-profit — will be able to assist you with this.

If you do not pay a bill, your creditors will contact you to find out when and how much you will be able to pay. Open all mail from creditors. Ignoring a bill will not make it go away!

If you do not pay your bills, your creditor may hire debt collectors to contact you about repaying your debt.

A debt collector is a third party hired by the creditor to collect the debt from you. Collection agencies and attorneys who contact you about a debt are debt collectors.

What can I do when a creditor is pressuring me to repay a debt?

What is a creditor?

A creditor is any person or organization to whom you owe money which has a finance charge added to the unpaid balance, or is scheduled to be repaid in installment payments.

“Unsecured debt” is debt which is not secured by property. A personal loan, medical bills and credit card debt are typical unsecured debts. Unsecured creditors must sue you and get a court order before they can collect their debt. A creditor cannot garnish or attach your wages without a court order.

With “Secured debt,” the creditor has an interest in property (such as a car or house) to guarantee payment of the debt. If you do not make your payments, the creditor can take back (repossess or foreclose on) the property used to guarantee the loan.

Remember, unsecured debts such as credit card balances and personal loans are your lowest priority for repayment. Unsecured creditors know this and will likely try the hardest to collect the debt.

  • Do not let a creditor pressure you into agreeing to a payment plan you cannot afford.
  • Do not be humiliated into sending a payment or a post-dated check you cannot afford.
  • Never (or almost never) take out a home mortgage to pay off credit cards or medical bills.

What can I do when my debt is referred to a debt collector?

Within 30 days of receipt of a notice from a debt collector about a debt, you may write a letter requesting proof of the debt if you disagree with the amount (including the total balance, interest charges, or late charges). The debt collector must stop all contact until you receive written proof of the debt. If the debt collector cannot provide written proof, he or she cannot contact you again. Keep a copy of all letters you send and receive about the debt.

If you do receive written proof of the debt and you disagree with the amount, you should write a letter telling the debt collector that you dispute the amount.

  • Creditors and debt collectors are limited by law on how and when they may communicate with you to collect overdue bills.

Are you being harassed by debt collectors?

Debt collectors are NOT permitted to use unfair and deceptive practices to collect a debt

  • Debt collectors are not permitted to call you at unreasonable times. Generally calls may be made only between 8 am and 9 pm, with limited exceptions.
  • Debt collectors cannot call and harass you continuously about your debt.
  • Debt collectors are not allowed to call you at work if you do not want them to. If you receive a call from a collector at your place of work, tell them that you do not want to receive calls from them.
  • Debt collectors cannot lie and misrepresent their identity in order to get you on the phone.
  • Debt collectors cannot threaten to bring criminal charges against you if you do not pay the debt.

If you are harassed by a debt collector be sure to get the name of the person and the company who called you and write it down along with the date and time of the call and exactly what the debt collector said to you. The debt harassment laws provide individuals with legal remedies, including monetary damages and attorney’s fees if a debt collector uses abusive tactics.

I keep getting phone calls and/or letters from debt collectors

Is there anything I can do?

You have the right to stop phone calls and other communication from debt collectors. The federal Fair Debt Collection Practices Act and the New Hampshire Unfair, Deceptive or Unreasonable Collection Practices Act protect you from unwanted contact by debt collectors.

If you do not want debt collectors to contact you:

  • Inform them that you are protected under both federal and state law.
  • Request, over the phone, that the debt collector no longer contact you.
  • Ask for the debt collector’s name and address and inform the debt collector that you will be sending a written notification of your request. The letter you send to the debt collector should contain your name, the account number of your debt (if known), and the following language:
    “I am writing to request verification of the above-referenced debt. I am also requesting that you stop all communications to me regarding the debt aside from sending verification of the debt. You are required to honor these requests by the Fair Debt Collection Practices Act.”
  • Send your letter by certified mail, with return receipt, and keep a copy of the letter and the postal receipt.
  • If you are represented by an attorney or credit counselor, you may request that any further communications be sent directly to them.

Telephone contact with creditors and debt collectors

When a creditor or debt collector calls, always write down the person’s first and last name, and the name of the company he or she represents. Also write down the date and time called, and notes about what the person said.

Under state and federal laws, creditors and debt collectors may not:

  • Call before 8 a.m. or after 9 p.m.;
  • Use profane, obscene, or vulgar language;
  • Threaten to take your possessions or have you arrested without first obtaining a court order; or
  • Frighten you with the threat of criminal prosecution if you do not forward a post-dated check.

You do not have to talk to creditors or debt collectors. If they use language that offends you, accuse you of fraud, or otherwise insult or pressure you, hang up.

  • A creditor or debt collector cannot send you to jail or take your children away from you.

Telephone calls at work

Debt collectors may not call you at work if you tell them not to call you there. If you tell a debt collector not to call you at work, follow up with a letter. Remember to keep a copy for yourself.

Debt collectors may call your family or friends as a third-party source and are limited as to what they may say. They may call to confirm your address or contact information but they must identify themselves. They may not talk to anyone except you about the repayment of the debt.

If you’re being represented by an attorney, debt collectors must contact your attorney directly.

Creditors may call you at work but must abide by the following guidelines:

  • Creditors may call you at work only if they cannot reach you at home.
  • Creditors may not call you more than once a month at work without your written permission.
  • If creditors leave messages for you at work, they must indicate their name and the name of the company they represent.
  • Unless specifically asked, creditors may not indicate that the call is about an unpaid debt.

Cease letters

Under federal law, if you send a letter to a debt collector requesting that all letters and telephone contact be stopped, the debt collector must comply with your request. Use our interview, Stop Contact, to answer questions to create your letter you can send to the debt collector:


Click here to create your Cease Letter

Make two copies of the letter. Send the original by first class mail. If you can afford the added expense, mail one copy by certified mail return receipt requested. When you receive the return receipt, staple it to your copy of the letter. Be sure to keep one copy for yourself.

After you write a cease letter, the debt collector must stop all contact. The creditor then has to decide whether to sue you in court to collect the debt. Not all cases of unpaid debt result in a lawsuit. Many times creditors do not follow through on a threat to sue.

Debt collectors who contact you after you have sent a cease letter are breaking the law. It is important to keep a record of all contact including the time called, the caller’s full name, who he or she represents, and what was said.

Sample cease letter

Date

Debt collector Name and Address

RE: [Name of Creditor]

Account No. [ ]

Dear Sir or Madam:

I request that you stop all contact with me regarding the above account as required by the Fair Debt Collection Practices Act, 15 USC sec. 1692c(c).

I am unable to pay the debt at this time.

Sincerely,

Your Signature

[Your Name and Address]

What To Do If a Creditor Sues You for Debt

Debt collection practices in New Hampshire are governed by two laws: New Hampshire’s Unfair, Deceptive or Unreasonable Collection Practices Act (RSA 358-C) and the federal Fair Debt Collection Practices Act (15 U.S.C 1692-1695).

Never ignore a lawsuit. Do not ignore mail received from a court.

New Hampshire courts use electronic filing. If you choose to represent yourself, you will respond to your lawsuit using TurboCourt, which automatically populates court-provided forms based on your responses to questions. Once the forms are completed, they are submitted electronically to the court.

When you respond to a lawsuit, you may challenge the amount of the debt the creditor claims you owe, or the amount of attorney’s fees requested by the creditor. If you ignore the lawsuit, you will lose any rights you may have to challenge the debt.

If the judge decides that you owe the debt, this is called a judgment. If a judgment is entered against you, you will likely receive a notice to appear at a periodic payment hearing to set up a reasonable repayment plan. At the hearing, you will have a chance to show that you are unable to pay the debt by filling out a statement of assets and liabilities. You must go to the “periodic payment hearing” to keep this right. If you do not attend the “periodic payment hearing,” the court could issue a warrant for your arrest.

The court cannot order you to pay a judgment from certain types of income. For example, if you only receive income such as Social Security, unemployment, welfare, or pension or have limited assets, you may be found as “judgment proof.” That means that even if a creditor sues you and wins a judgment against you, a court CANNOT order you to pay the debt.

For a full list of protected or “exempt” income, click here.

Click here to create a letter telling a creditor or debt collector that you are judgment proof.

Low-income individuals may contact 603 Legal Aid by applying online or calling (603) 224-3333. If you are not low income, call Lawyer Referral Service (LRS) at (603) 229-0002 to obtain the name of an attorney (there may be a nominal fee for the referral made by LRS).

This information is based on the law in effect at the time of publication. It is issued as a public service for general information only and is not a substitute for legal advice about the facts of your particular situation.

Are you being sued in a small claims case?

Check out our “Small Claims” page for more information.

What will happen if I am sued by a creditor?

Even though you have the right to ask debt collectors to stop contacting you, you still owe the debt. Debt collectors may sue to collect your unpaid debt. DO NOT ignore the lawsuit. You must respond to the suit and appear in court to protect all of your rights. However, even if you owe money, you may have defenses to avoid repaying some or all of the debt.

For example, if you have certain types of income and limited assets you may be “collection proof.” That means that even if a creditor sues you and wins a judgment against you, a court CANNOT order you to pay the debt. The following types of income cannot be taken to pay a debt:

  • Social Security benefits, Supplemental Security Income (SSI), and Social Security Disability Insurance (SSDI) — See 42 U.S.C. Section 407 (this federal law says that Social Security income cannot be taken to satisfy a debt) and Todd v. Romano (this New Hampshire case says Social Security income cannot be taken to satisfy a debt)
  • Weekly wages of up to 50 times the minimum hourly wage ($362.50) — See NH RSA 512.21
  • Unemployment compensation — See NH RSA 282-A:159
  • NH Retirement System income — See NH RSA 100-A:26-a
  • Veteran’s benefits — See 38 U.S.C. Section 530
  • Armed Forces retirement pay — See 10 U.S.C. Section 1440
  • Civil Service retirement benefits — See 5 U.S.C. Section 8346(a)
  • IRAs, annuities, pension plans, 403(a) plans, and 403(b) plans, including any distributions from such funds up to $362.50 per week — See NH RSA 511:2(XIX) and NH RSA 524:6-a, II)
  • Firemen’s Retirement System — See NH RSA 102:23
  • Policeman’s Retirement System — See NH RSA 103:18
  • Railroad Retirement Act annuities and pensions — See 45 U.S.C. Section 231m
  • Worker’s Compensation — See NH RSA 281-A:52
  • Public Assistance to the Blind, Aged, or Disabled Persons and Disabled Children — See NH RSA 167:25

Many other types of income are also protected by state or federal laws and cannot be taken to pay debts.

NEVER pay credit card bills at the expense of more important bills such as rent, mortgages or utility bills.

If you are sued by a creditor and have limited income, you should contact an attorney or the Justice in Aging Project for help.

Protecting Your Rights

If you feel your rights have been violated regarding the collection of a debt, contact the Office of the Attorney General, Consumer Protection and Antitrust Bureau, 1 Granite Place South, Concord, New Hampshire 03301. You may also call (603) 271-3641, email , or download a complaint form or file a complaint online.

For help with a problem with an out-of-state debt collection agency, contact the Federal Trade Commission, 600 Pennsylvania Ave., NW, Washington, DC 20580. You may also call 877-FTC-HELP (877-382-4357).

Low-income individuals may contact 603 Legal Aid by applying online or calling (603) 224-3333. If you are not low income, call Lawyer Referral Service (LRS) at (603) 229-0002 to obtain the name of an attorney (there may be a nominal fee for the referral made by LRS).

This information is based on the law in effect at the time of publication. It is issued as a public service for general information only, and is not a substitute for legal advice about the facts of your particular situation.

I received a bill from a creditor that I believe has a mistake in it. How do I get it straightened out?

You have a right under the Fair Credit Billing Act to have your bill reviewed for possible billing errors. The legislature enacted the national Fair Credit Billing Act as part of the Truth in Lending Act (TILA), to ensure that people who use credit cards have a way to verify their credit balance in the event of a billing error. The TILA establishes a three-step procedure that you need to follow in order to dispute possible errors on your bill. This procedure only applies between you and your creditor (credit card company). It does not apply to a possible dispute you may have with a particular store where you used your credit card.

If you detect a billing error, you need to submit a written letter to the credit card company within 60 days of the date you received your billing statement. In your letter, make sure you include your name, account number and a brief statement about the amount and nature of the error at issue. Even though your credit card company may have a toll-free number that you can contact in the event of errors, you should always follow up with a written letter as well. Remember to keep copies of all the documentation you send and receive in a safe place for your records.

The credit card company must send you an acknowledgment in the mail no later than 30 days after the company receives your letter regarding the error. The company will generally correct the error by the next billing date if the error was a result of the company’s miscalculations. Also, the company has either two billing cycles or 90 days, whichever comes first, to explain the billing charge to you. The company is also required to provide you with proof of the charge if no error is detected.

During the time the company is investigating your claim, you are free of any responsibility for payment of the charge in dispute. In addition, you are not liable for any of the interest that may accrue on the charge in dispute.

After the investigation is done, the company can either agree with your claim, or disagree. If the company agrees, it must correct your bill. If it does not agree, it must send you a written explanation.

As soon as the dispute is over, the company must notify you about how much money you owe as well as when your payment is due.

If the above procedures are not followed, the company may forfeit its right to collect on the debt in dispute. In addition, the company forfeits its right to get money from the debt’s finance charge, up to a maximum of $50.

If you have concerns that your billing errors are not being responded to, contact the New Hampshire Consumer Protection & Antitrust Bureau at:

NH Consumer Protection & Antitrust Bureau
(603) 271-3641 or (603) 271-3643
33 Capitol Street
Concord, NH 03301-6397

or contact the Consumer Financial Protection Bureau at:

Consumer Financial Protection Bureau 1-855-411-CFPB (2372)
P.O. Box 4503
Iowa City, IA 52244

For more information, please see:

I am being billed by a doctor for the balance over and above what my Medicare and supplemental insurance will pay. I cannot afford to pay. What should I do?

Although Medicare will pay a portion of your health care costs, you may be responsible for a portion of the bill. Your share of the payment is called a co-payment. If you do not have supplemental insurance that covers the co-payment and you fail to pay the doctor for your share of the bill, you become indebted to the doctor as you would any other creditor. However, even though you will become responsible for paying the doctor, there are limitations on the amount the doctor may charge you.

Generally speaking, if the doctor participates in Medicare programs (s)he needs to follow Medicare guidelines. The guidelines do not permit the doctor to charge you more than the approved Medicare charge.

If your doctor does not participate in the Medicare programs, (s)he is not obligated to follow the same guidelines. Even if the doctor does not participate in the Medicare programs, the government places a cap on the amount of money the doctor can charge, for the protection of those who are on Medicare. This cap is called a “limiting charge.” The government allows the doctor to charge no more than 115% of the amount that is Medicare approved for that particular service. Thus, your doctor cannot bill you for more than 115% of the amount Medicare would cover.

For example, assume you receive medical services for which Medicare will pay $100. A doctor who does not participate in the Medicare program cannot charge you more than $115 for that particular service. After Medicare pays the $100, you are responsible for the rest (co-payment of $15). If you are being charged for more than 115% of the Medicare approved bill, your doctor will be subject to sanctions from the Centers for Medicare and Medicaid Services (CMS). If Medicare does not cover the bill and the bill does not exceed the cap charge, you will have to pay for the services.

For further information, please see:

  • N.H. Rev. Stat. Ann. Ch. 415-F – Medicare Supplemental Insurance
  • 42 U.S.C. §1395pp – Limitation on Liability Where Claims are Disallowed

My spouse died recently. All of our property was jointly owned and there was no probate proceeding. I am receiving medical bills. I did not authorize these charges. Am I responsible to pay these medical bills?

Yes, in New Hampshire, if your spouse received medical care that was medically necessary and your deceased spouse’s estate is unable to pay for such care. This is called the “Doctrine of Necessaries.”

You may not be responsible for the medical debts of your deceased spouse if you can show that the medical services your spouse received were unnecessary or against the will of your spouse. For example, if the hospital provided care to prolong the life of your spouse that exceeded the basic care needed to provide your spouse with comfort, you may not have to pay. In addition, if the hospital provided such services and you can show that your spouse did not wish to have his/her life prolonged, then you may not be responsible for the debt incurred as a result of such medical services.

If you cannot afford to pay for your deceased spouse’s medical bills, you should consider applying for Medicaid to see if your spouse qualified for Medicaid benefits. Medicaid will look back 90 days from the date of your application to determine if your spouse was eligible for Medicaid at the time when (s)he passed away. If your spouse was Medicaid eligible at the time of his/her death, you may be able to get Medicaid to pay for the medical bills.

For more information, please see:

  • N.H. Rev. Stat. Ann. Ch. 546-A:2 – Uniform Civil Liability For Support
  • St. Joseph Hosp. of Nashua v. Rizzo, 141 N.H. 9, 11-12 (1996).
  • 42 U.S.C. § 1396a (a)(34) – State Plans for Medical Assistance
  • 42 C.F.R. § 435.915 – Effective Date

Are my social security or private pension benefits subject to attachment and/or levy by my creditors?

Social Security and Veterans’ Benefits:

Social Security and Veterans’ benefits are not subject to attachment by most creditors. However, the federal government may access such benefits if you owe taxes, child support or alimony.

Private Pensions:

Under state law, income received from a retirement or pension plan is protected up to 50 times the minimum wage. Currently this amount is $362.50 per week.

Assets held in retirement and pension plans are fully exempt from attachment under state law. In addition, some private pensions are regulated by federal law and are protected from being attached by creditors. However, in order for a private pension to be covered by this federal protection, the pension must follow the guidelines set out in the Employee Retirement Income Security Act (ERISA). If the pension does comply with the guidelines of ERISA, these plans are considered “Qualified Plans.” While you are allowed to use a percentage of your retirement income to pay a bill, it is strictly voluntary by you and your creditors cannot access the money.

If you have any questions concerning a pension plan, contact The New England Pension Assistance Project:

The New England Pension Assistance Project 1-888-425-6067
https://www.umb.edu/pensionaction/

and/or:

Pension and Welfare Benefits Administration
(617) 565-9600
Boston Region Office
J.F.K. Federal Building
15 New Sudbury St., Room 575
Boston, MA 02114

Wages from Employment:

It is very difficult to garnish wages in New Hampshire. New Hampshire law, under the trustee process statute, protects weekly earnings up to 50 times the minimum wage. Currently this amount is $362.50 per week.

For more information, please see:

  • N.H. Rev. Stat. Ann. Ch. 511:2 – Attachable Property and Exemptions
  • N.H. Rev. Stat. Ann. Ch. 512:21 – Exemptions from Trustee Process
  • N.H. Rev. Stat. Ann. Ch. 524:6-a, II – Periodic Payments of Judgments
  • 38 U.S.C. § 5301 (a) – Nonassignability and Exempt Status of Benefits
  • 29 U.S.C. § 1056 (d) ((1)-(3)) – Assignment or Alienation of Plan Benefits
  • 42 U.S.C. § 1383 (a)(2)(B)(iii)(III) – Procedure for Payment of Benefit
  • 42 U.S.C. § 407 – Assignment of Benefits
  • 42 U.S.C. § 659(a) – Enforcement of Individual’s Legal Obligation to Provide Child Support or Alimony
  • https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/erisa

Can my creditors force me to sell my home to pay my debts?

New Hampshire’s homestead exemption may protect a portion of the equity in a person’s primary residence from certain creditors. The amount protected and the rules for claiming the exemption depend on current law and the property owner’s circumstances. Review RSA 480:1 or speak with an attorney before relying on the exemption in a debt collection matter.

For further information, please see:

  • N.H. Rev. Stat. Ann. Ch. 480:1 – Homestead Rights
  • 2015 N.H. Laws Ch. 57:1 (H.B. 147)

A bill collector keeps calling me about a bill I simply can’t afford to pay. What should I do?

You have the right to stop phone calls and other communication from debt collectors. The federal Fair Debt Collection Practices Act protects you from unwanted contact by debt collectors.

Debt collectors are not permitted to call you at unreasonable times. Generally, calls may be made only between 8 am and 9 pm, with limited exceptions. If you do not want debt collectors to contact you, inform them that you are protected under both federal and state law. The Federal law that regulates the collection of debts is called the Fair Debt Collection Practices Act (FDCPA), and the New Hampshire statute is titled Unfair, Deceptive or Unreasonable Collection Practices. Both statutes provide individuals with remedies, including monetary damages and reasonable attorney’s fees, in the event that the collection representative uses abusive tactics.

In a nutshell, it is illegal for debt collectors to use any unfair or deceptive collection practices. They cannot call and harass you continuously about the debt you owe. Debt collectors are not allowed to call you at work if you do not want them to. In addition, debt collectors cannot lie and misrepresent their identity in order to get you on the phone.

Request, over the phone, that the debt collector no longer contact you. Additionally, inform the debt collector that you will also be sending a written notification of your request. If you are represented by an attorney or credit counselor, you may request that any further communications be sent directly to them. Be sure to send your letter by certified mail, with return receipt, and to keep a copy for your own records. It is good practice to keep track of any unwanted communication, written or phone, that debt collectors have with you.

Even though you have the right to ask debt collectors to stop contacting you, you still owe the debt. Debt collectors may still sue to collect your unpaid debt.

If you have any concerns about a debt collection agency in New Hampshire, please contact the New Hampshire Consumer Protection & Antitrust Bureau at:

NH Consumer Protection & Antitrust Bureau
(603) 271-3641 or (603) 271-3643
33 Capitol Street
Concord, NH 03301-6397

or contact the Consumer Financial Protection Bureau for out of State debt collection issues at:

Consumer Financial Protection Bureau 1-855-411-CFPB (2372)
P.O. Box 4503
Iowa City, IA 52244

For more information, please see:

I just got a letter in the mail saying that I owe money on my federal student loan. Do I have to pay it?

It depends. You can get your loan discharged (you won’t have to pay) if you fall into one of the following categories:

  1. If you are a veteran and the Secretary of Veteran’s Affairs determined that you are unemployable because of a service-related condition.
  2. If you receive Social Security Disability Insurance or Supplemental Security Income you only need to submit a Social Security Administration notice of award of these benefits.
  3. If you are totally and permanently disabled, you can submit a certification from your doctor that you are “unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that… has lasted… or is expected to last for a continuous period of not less than five years.” After you get the certification, you have 90 days to apply for a loan discharge.

If you do not fit into one of the above categories, it is unlikely you can get your loan discharged.

If you believe you may qualify for a total and permanent disability discharge, review the current eligibility requirements and application instructions on the Federal Student Aid website.

For more information, please see:

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This article is meant to help you understand your rights and options. It provides general legal information only, not legal advice. If you have questions about your specific situation, please contact us or speak with an attorney.

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