Protecting Yourself from Debt Collectors in Minnesota

Nobody likes having debt collectors contact them, and an already unpleasant situation is often exacerbated by debt collectors who fail to adhere to state and federal laws protecting debtors. A debt collector is anyone who regularly performs debt collection services.

In Minnesota, debt collection agencies and their employees must be registered with the state in order to legally perform collection activities within it. The federal Fair Debt Collection Practices Act (FDCPA) was enacted by Congress in response to abuse and harassment by collection agencies which led to increased bankruptcy filings. Thus, the FDCPA seeks to regulate the conduct of debt collectors.

Read on to learn how you can protect yourself from debt collectors in Minnesota.

The FDCPA prohibits certain conduct, such as:

  • Contacting your relatives, neighbors, or employer about the debt
  • Threatening to sue, to damage your credit rating, to repossess, or to garnish absent actual intent
  • Making repeated telephone calls or calls at unreasonable times—before 8:00 a.m. and after 9:00 p.m. unless you have specifically given the debt collector permission to call during that time
  • Calling you at work or other inconvenient places
  • Informing your boss of the purpose of the call
  • Using obscenities, insults, or racial or ethnic slurs
  • Sending letters appearing to be from a court
  • Requesting post-dated checks and threatening to prosecute you if they bounce
  • Making false representations while trying to collect the debt
  • Using false claims to collect information about you from others
  • Threatening to have you arrested

Minnesota law further regulates collection practices. In addition to FDCPA restrictions, state law requires more disclosure by the debt collector such as their name, agency, telephone number, and that they are licensed in Minnesota.

How to Protect Yourself

If you have been victimized by debt collectors, you have several remedies. You can:

  • Report them to the Federal Trade Commission and Minnesota Attorney General’s Office
  • Request debt validation and proof of your liability. Within five days of their first contact with a debtor, collectors must send written correspondence with the creditor’s name and the amount owed. Filing a dispute stops collection actions for 30 days.
  • Ask the creditor for proof of the last action on the debt. In Minnesota, there is a six-year statute of limitations on consumer debt which begins when the last action was taken or when the loan first became delinquent.
  • Stop collection calls. Sending a “no contact” letter to creditors immediately stops contact except for notification of further legal action.
  • Respond to legitimate court documents such as summons and complaints promptly, otherwise, your creditor may obtain a judgment against you and subsequently garnish your wages or bank accounts.

For more information or to schedule a consultation if you have been a victim of unscrupulous debt collectors, please contact us.

What are Your Rights Regarding Debt Collection in Minnesota? An Overview of State and Federal Law

Federal and state laws protect consumers from harassment or abuse by debt collectors. In the state of Minnesota, debt collectors are licensed and regulated by the Minnesota Department of Commerce, and the federal Fair Debt Collection Practices Act (FDCPA) protects consumers’ rights.

As a consumer, what rights do you have regarding debt collection in Minnesota?

Disputing a Debt

The debt collector must send a written notice within five days of first contacting you informing you the creditor owed and the amount of the debt. To dispute any part, you must submit a written letter to the debt collector within 30 days giving specific reasons for the dispute. Upon receipt of this letter, the debt collector must, by law, cease any collection activities until the dispute is investigated.

Stopping Telephone Calls and Letters

You have the right to have debt collectors stop calling and writing you. By sending a “Stop Contact Letter” that clearly tells them to stop contacting you about debt, which debt, and the account number they must cease all contact. However, it is important to note that a no-contact letter does not mean you can ignore court papers because doing so amounts to contempt of court and you may face jail time or fines.

Payment Plans and Multiple Debts

Many collection agencies will let you set up a payment plan and will oftentimes reduce or freeze interest charges as long as you make regular payments. Some creditors may even settle for less than the total amount owed. Whatever type of plan you and the debt collector agree on, make sure you get the details in writing. In some cases, debt collectors may try to collect on more than one debt. If you are on a payment plan, you can specify which debt you want you payment applied to, as long as it is not one in dispute.


A creditor or debt collector can sue you and obtain a judgment. If you ignore court documents about this, the debt collector can have your wages or bank account garnished for the amount of the judgment. In some cases, they can even force the sale of your property.

Protected Money and Property

Income from Social Security, pensions, veteran’s benefits, SSI, EITC, or other type of governmental needs-based program is protected from garnishment. If you are employed, your net wages up to 40 times the federal minimum wage are protected (about $1,240 per month), and, in most cases, a garnishment can only affect up to 25 percent of your net income.

Houses and vehicles can be taken in certain cases. If the debt is for a mortgage default and the house if in foreclosure, then you can lose it. Similarly, if you fail to pay your car loan, then repossession may occur. Otherwise, your house is protected under a Homestead Exemption if you have less than $390,000 in equity and it is your primary residence. You are allowed to keep personal property worth up to $10,350, and your vehicle that has up to $4,600 in equity.

Abuse and Harassment

Some unscrupulous debt collectors will try anything to intimidate debtors; however, they are not allowed to:

  • Contact other people about your debt; however, they can call others to get your contact information. They may not state that they are a debt collector unless asked. If you have a lawyer, the debt collector can ONLY contact your lawyer.
  • Use obscene or abusive language
  • Threaten you with criminal charges or arrest
  • Call you before 8:00 a.m. or after 9:00 p.m.
  • Call you at work if they know your employer disallows personal/creditor calls
  • Collect any cash without providing you with a receipt
  • Send you correspondence pretending to be a lawyer, the court, or the government
  • Refuse you give you the name of their agency
  • Give you legal advice
  • Threaten you with legal action they don’t plan on taking

If you have suffered from any of these abuses, maintain a careful record or all communications. You can file complaints with the Minnesota Department of Commerce and The Federal Trade Commission. If you are seeking legal recourse, you have one year to bring a suit against debt collectors for violating the FDCPA.

If you have any questions or for more information, please contact us.

What debt collection practices are prohibited in Minnesota?

If you are being aggressively pursued by a debt collector, you are probably asking, “What debt collection practices are prohibited in Minnesota?” Unfair debt collection practices are a leading motivator for filing bankruptcy. Many people who find themselves unable to pay their debts don’t want to get away with not paying. They just want the harassment to stop.

The current economic environment has made debt collection big business. In recent years, people have found their mortgages underwater, they have lost their jobs, or their income has not kept pace with the cost of living. Many debt collectors are vultures, preying on the misfortune of others.

Education is key when dealing with debt collectors. Minnesota’s consumer protection statutes protect you by prohibiting the unethical practices of debt collectors. In many ways, Minnesota law mirrors federal law. However, Minnesota takes things a step further. A debt collector cannot:

  • Threaten legal action or wage garnishment if they do not intent to take action and have an attorney,
  • Use an officer of the law to serve paperwork unless it is part of their lawful duties,
  • Threaten actions that violate any Minnesota law,
  • Give legal advice or practice law if they are not legally competent to do so,
  • Use letters and correspondence that are deceptive, such as using notices that look like court documents,
  • Take action with the intent to shame, like publishing your name in a newspaper or on the internet,
  • Use an attorney to collect the debt if the original creditor has not authorized the action,
  • Refuse a proper request to validate a debt,
  • Use a business name that implies they are a government agency,
  • Commingle collected money with the agency’s operating funds,
  • Communicate using a recorded message unless the initial contact is with a live person,
  • State health care services will be withheld until debt is paid,
  • Fail to disclose the agency’s full legal name as it appears on their license,
  • Use neighbors or any 3rd party not living in the consumer’s home to make contact,
  • Collect money not owed or fail to return an overpayment,
  • Collect fees that are not authorized in the original agreement,
  • Manufacturing documents to deceive either the consumer or creditor, or
  • Violate any provision of the Fair Debt Collection Practices Act of 1977.

If you would like to talk more about what debt collection practices are prohibited in Minnesota, or need more information, please contact us.

How An Attorney Can Help You With Debt Collectors

Debtors hate when collectors are constantly calling their phones. In the same manner, creditors hate when those who are in debt avoid picking up the phone. It is important to understand how an attorney can help you with debt collectors if you are constantly being contacted due to money you owe.

If creditors are constantly calling your home and you are unable to pay back loans at the time, it is in your best interest to consult with a legal professional. Considering a debt settlement attorney can ultimately help you reduce or eliminate loans to avoid debt collectors. A debt collection attorney can represent your case. The attorney will develop strategies to protect yourself from creditors.

When working with a debt collection attorney, you can expect to pay back the amount of money you borrowed or less if your attorney is able to negotiate the amount down. The attorney will put a plan in place for the creditor to gain back the money they loaned out. The timeframe and the amount they will get back depends on the rulings of the judge. In some cases, you will be able to settle outside of court. In this instance, terms will be negotiated between you and the collector.

Whether you are a debtor or a collector, the issue should be resolved so that neither party has to contact the other party in the future. If you feel like you cannot handle a debt collector on your own, contact us and let us help you.

Debt Collection Abuse

Under the law, a debt collector is prohibited from violating the Fair Debt Collection Practices Act (the “FDCPA” or the “Act”).  If the debt collector violates the Act, you may sue the debt collector and our services are free unless there is a recovery.  That is, our services are contingent on a recovery.

The Following Are Some Of The More Common Violations By Collectors:

  • Calling you at work after you tell the collector you can’t take calls at work
  • Communicating with others regarding your debt
  • Calling your family, friends, employers or co-workers
  • Disregarding a written request from you to cease further contact
  • Harassing you, abusing you, threatening immediate garnishment or imprisonment
  • Threatening to destroy your reputation
  • Adding improper charges to the debt
  • Lying to you or falsely implying that you have committed a crime
  • Using any unfair, deceptive, false or misleading practice in an attempt to collect a debt
  • Concealing their identity on the phone
  • Failing to fully identify themselves
  • Using obscene or profane language or simply not dealing with you in a professional manner

Computer Generated Calls Or Texts From Debt Collectors or Businesses To Your Cell Phone Generally Violate The Law

Save these calls and call PHILLIPS LAW, PLLC.  You may be entitled to compensation.  Take photographs or “screen shots” of the incoming calls on your cell phone to preserve the evidence.

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