Dealing with a debt collector has to be one of life's most stressful experiences. Harassing phone calls and threats can drive you to the edge. What's worse, a collector may embarrass you by contacting your employer, family or neighbors. You may even be hounded to pay a debt that is not rightfully yours. While collection agencies have a job to do, there are limits on how far a debt collector can go.
According to Creditcards.com, debt collectors are often hired by original creditors to collect an outstanding debt. However, at other times the original lender has written off your debt and has sold it to a collection agency for pennies on the dollar. These types of collection agencies are sometimes known as junk debt buyers. Because the original creditor has written off the debt, the original creditor can no longer help you. So called zombie debt collectors are debt collectors who attempt to collect after the stautute of limitations has expired on the debt. According to the Fair Debt Collection Practices Act which applies to debt collection agencies but not original creditors, debt collectors may not make harassing telephone calls such as repeated calls to you while you are at work. They may only call between 8 a.m. and 9 p.m. on Monday through Saturday and on Sunday between 1 p.m. and 5 p.m. No calls are allowed on statutory holidays. Collection agencies may not contact third parties such as your friends, relatives, neighbors or employer for any information other than your address or telephone number.
Creditcards.com suggests some things you can do if you are being harassed by a debt collector. First, make sure that the debt is your debt. You have a right to verification of the debt. Debt collectors must respond within 30 days of receiving your notice. Second, check the statute of limitations. There can be no legal action taken against you after the statute of limitations has run. Be aware that making a payment causes the statute of limitations to restart. This is why agents may ask you to make a small payment to avoid “further proceedings.” Third, you may ask the collection agency to cease communications. They will only be able to contact you to let you know that they are not pursuing your debt any more or that you are subject to legal action.
You may often be able to negotiate with the collection agency. They can often reduce the amount owed by as much as 70% or more. This is especially true now as more and more consumers are falling being on their bills due to the bad economy. Here and here are some additional tips on dealing with debt collection agencies.
You may often be able to negotiate with the collection agency. They can often reduce the amount owed by as much as 70% or more. This is especially true now as more and more consumers are falling being on their bills due to the bad economy. Here and here are some additional tips on dealing with debt collection agencies.
Collectors can NOT threaten you in any way. If you feel harassed or threatened by a collection agency, file a complaint with Federal Trade Commission.
Test your knowledge of your debt collection rights here with this week’s quiz, “Do you know your debt collection rights?”
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Results of last week’s poll are in. Sixty percent of readers said that restrictions on credit card use for young adults between the ages of 18 and 21 should depend on the situation. Forty percent said that restrictions on credit card use for young adults between the ages of 18 and 21 should be unqualified.
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I found that your blog was very interesting and it had alot of good information in that I am sure not alot of people is aware of.
ReplyDeleteThe majority of civil claims I see at work are "assignees" of the original debt-companies that purchase debt from the original creditor after it has been "written off." You are so right about people not knowing their right-many people think that because a debt was "written off" it can no longer be collected, or that if they just ignore a complaint it will go away. Unfortunately for those people, that is just not the case. Based on what I have seen, I would say there is big money in going after bad debts, and not much help for those on the other side of the equation. Nice job!
ReplyDeleteI also found your blog extremely interesting. I definately liked your opening paragraph. It made me remember all of the times I have recieved phone calls like that at work (they are asking for someone else), but it scared me because I knew that it could happen to me.
ReplyDeleteI worked in collection at the bank. We used a method called skip tracing and yes I have contacted someones family members and even next door neighbors if my attempts to reach the party came up empty. Good information to let people know about how accounts are sold and being aware of the statute of limitations.
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