I wanted to share an e-mail with you about Pay Day loans and some information that I think you need to know.

Dear Bob,

Last year I got into a financial bind due to the ice storm. I couldn't get to work and was not paid for several days. As a result I foolishly took out two payday loans. I've paid one back but the other is with the debt collector. I've been getting calls and they refuse to accept the payment arrangements that I suggest. The recent call I got was with a threat of filing charges for malicious conduct. My question is what are my options do I need to get an attorney? Any help will be greatly appreciated.

The best way to deal with a debt collector is to understand how to manage the debt collection process. I write about it extensively in my book Deceptive Money. For this particular situation, the listener needs to know three things.

• A debt collector cannot threaten to do something that they don’t have the power to carry out.

Filing charges for malicious conduct is a threat that they cannot successfully execute. As a result, they have just violated the Fair Debt Collection Practices Act.   This is the legislation that was written to protect consumers from debt collector abuse and harassment.

• The listener could potentially sue for this violation without having to pay up-front legal fees

The Fair Debt Collection Practices Act says that a debt collector who fails to comply with the Act is liable for all costs including reasonable attorney fees. Thus, an attorney that specializes in this area could bring a lawsuit to court on contingency. Most people don’t know this about seeking the help of an attorney. Keep in mind, there aren’t many attorneys that practice this type of law.

• This type of Harassment is a disturbing new trend

Attorney Dean Malone, who specializes in this type of law, told me that he is seeing a great deal of this type of Pay Day loan harassment.   So, if you find yourself dealing with this situation, don’t be alarmed by threats and seek appropriate professional help. You can learn more at deanmalone.com.