6/18/2013 7:15 PM ET|
8 debt collection mistakes to avoid
Being in debt is bad, but it's manageable. Don't make things worse by not paying attention.
You think you’re on top of things . . . and then the phone rings. A debt collection agency claims that you owe them money. What do you do? Or perhaps the bigger question should be: “What do you not do?”
Too many people make mistakes with that first phone call -- mistakes that can cost them dearly. Read on to know how to avoid these common debt collection faux pas.
1. Ignoring those calls
What we mean: Thinking that you can just ignore the calls when the number shows up on caller ID won’t make the debt -- or the collector -- go away.
It can be intimidating when you answer the phone and a voice at the other end starts talking about collecting a debt. But if you continue to ignore the calls, they will start to send collection letters -- and possibly notice of legal action. Don’t let it get to that stage.
What to do: Answer the phone, remain calm and know your rights (more on that below.) Before they call again, get your paperwork in order (more on that later, too), so you won’t be caught off guard when you answer the phone. If they’re already sending letters, don’t toss them -- read them and seek advice.
2. Not verifying the debt in writing
What we mean: Always ask for written verification of the debt to be mailed to you. In trying to track down a debtor, companies may resort to something as simple as checking the phone directory. Do you want to be held responsible for someone else’s debt simply because that person has the same name as you?
What to do: Explain to the caller that you do not make any decisions on the phone, and that you need written proof of the debt. (By law, they must provide it.) Request that they mail you all of details of the debt, including the name and address of the borrower, the amount borrowed, the date the debt was incurred and, if possible, a copy of the original debt application or approval letter.
3. Not knowing the legal status of your debt
What we mean: Some debts are subject to a statute of limitations. While the actual amount of time varies from state to state, this means that if the creditor has not made contact with you in a specific time period (typically five to seven years), that debt can legally be struck from the books.
What to do: Check the debt statute of limitations for your state. The statute applies when the company owed the money has failed to make reasonable efforts to obtain the money owed, not when you have ignored attempts to collect. When does the clock start ticking? Usually from the date of last activity on the account, but this may vary by state.
If the statute of limitations has expired on your debt, write to the debt collector, advising them that it has expired, and not to contact you anymore. Sending the letter by certified mail ensures that they have received it. If the statute has not passed, talk to a legal or financial professional experienced in debt collection to learn about your repayment options.
4. Providing credit card information or agreeing to a payment plan before seeking advice
What we mean: Do not give your credit card or bank info to the person on the phone without first requesting -- and reviewing -- written evidence of the debt. A huge business in today’s debt collection market is zombie debt, or debts that have expired but have been purchased by one or more debt collection agencies. As soon as you acknowledge the debt, and offer to make payments, the debt is reactivated, making you fully liable.
What to do: After receiving written verification of the debt, seek independent financial advice. The collection agency will want to receive their money in the time that’s most beneficial to them, but a financial advisor may be able to help you find alternative repayment options. Once you’ve agreed to a plan, it can be difficult, but not impossible, to make changes. But even with an agreement made via phone, you are entitled to receive written details about the agreed-to plan. And be sure to seek financial advice as soon as the paperwork arrives.
5. Not knowing your legal rights
What we mean: Even if you owe money, you still have legal rights to protect yourself from debt collectors who may not be following the rules. The Fair Debt Collection Practices Act is made available by the FTC and offers a clear explanation of your rights as a consumer. For instance, did you know that a collection agency must identify themselves clearly, must provide any written evidence you request and can only call between certain hours?
What to do: Download your free copy of the Fair Debt Collection Practices Act (FDCPA) (pdf). It may look dense and be full of legal jargon, but it’s actually very straightforward when it comes to explaining what a collection agency can and can’t do when they contact you. And be sure to let anyone who calls regarding a debt know that you’re aware of its contents.
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6. Seeking advice from the wrong source
What we mean: Look for guidance from the National Foundation for Credit Counseling, or a certified financial planner or a legal advisor with specific experience in debt collection. Some people make the mistake of calling their state’s treasury or revenue office in the belief that they can help, but they cannot provide individual legal advice.
Warning: Not all advisors are created equal. You wouldn’t see a heart doctor for a stubbed toe, so it only makes sense to seek out professionals with experience in the field of debt collection. They will be more up to date on current legal and financial developments, and can help save you a lot of headaches in the long run.
What to do: Find a qualified financial planner. If seeking legal advice, ensure that the attorney is qualified to practice in your state, and that the person’s area of expertise is relevant to your situation. (Be wary of any free online sites that purport to give financial advice, but that are, in fact, linked to collection agencies.) And remember that you may not receive the advice you’d like to hear—even the most specialized professional cannot make your debt magically disappear.
7. Not knowing who Is collecting your debt
What we mean: Do you know which company you’re paying the money to? Is it the same company that you originally borrowed from? Or is it a collections agency? If so, the debt may have legally expired.
Given the various economic upheavals of the past decades, banks have failed, debts have been passed from one company to another and the company calling to collect may not be the same company from whom you originally borrowed money.
Furthermore, as debts pass the statute of limitations, debt collection agencies buy them from the original creditor for pennies on the dollar in the hopes of recouping huge profits. Even though the statute of limitations may have passed, if an agency can get you to admit to owing the debt, liability is revived and they can legally collect the debt. It’s not unusual to have multiple companies all attempting to collect the same zombie debt, and if you’re not careful, you could end up having to repay them all.
What to do: Go back to that written proof. Follow the trail to see who is now contacting you about the debt, and how they came to be in possession of it. This can help you to determine whether the debt has been legitimately passed to a collections agency or whether it has expired and is now being pursued as a zombie debt.
8. Not reporting harassment
What we mean: Harassing behavior may include calling outside permitted hours, refusing to provide written proof of debt and threatening arrest or imprisonment. The number of complaints against collection agencies has skyrocketed in recent years, and the judicial system is taking the matter of harassment very seriously. Last year, an Atlanta-based company was forced to forgo collection on more than 31,000 delinquent accounts (exceeding $15,000,000) as punishment for violating collections laws.
What to do: Know your rights.If a caller appears to be in violation of the Fair Debt Collection Practices Act, remind them of that fact -- and tell them that you will call your state attorney to report the harassment. And remember that it’s never too late to report harassment. While there may be no legal recourse for you, your complaint may be part of a thick file that eventually helps to shut down those who continue to threaten others.
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Ignoring the calls works pretty damn good. I was getting wrong-number calls from debt collectors. Telling them that they had the wrong number and threatening legal action did no good. I even sued one agency for $5000.00 and won. They continued to call, so I ignored all future calls from any collection agency. They all finally stopped calling. Haven't received any calls in over two years now.
If you really do have a debt, contact the original company to which you owe the money. Work out a payment plan with them. Most companies will be more than willing to work out a payment plan and skip collection agencies. Completely ignore any and all contact from collection agencies. They will, eventually, give up. Besides, you'll never receive anything in writing from any of the agencies, nor will they honor your request to cease and desist all contact until sending you written info regarding your supposed debt.
1. THE ONLY WAY FOR THE STARTING DATE OF STATUTE TO CHANGE IS IF YOU MAKE ANY PAYMENT ON THE ACCOUNT. ANY OTHER CHANGE OF THE DATE IS ILLEGAL ACCORDING TO THE FDCPA.
I KNOW THIS FROM PAST EXPERIENCE WHEN I HAD TO DEAL WITH A DEBT THAT HAD EXPIRED ACCORDING TO THE STATUTE OF LIMITATIONS. INITIALLY I HAD GRIEF UNTIL I READ BOTH MY STATE'S STATUTE OF LIMITATIONS AND FDCPA.
THEN I STARTED TO HAVE FUN (REVENGE TYPE) WITH A COUPLE OF **** DEBT COLLECTORS. NEEDLESS TO SAY IT COST THEM FEDERAL FINES AND WHAT THEY HAD TO PAY ME AFTER I WON IN SMALL CLAIMS COURT.
RIGHT AFTER I GOT THE JUDGMENT AGAINST THEM I WENT TO THEIR OFFICE AND STARTED TO TAKE OFFICE EQUIPMENT THE EQUALED THE AMOUNT OF THE JUDGMENT. I ALSO HAD A COUNTY SHERIFF WITH ME. IF WAS ONLY AFTER I RECEIVED A CHECK FROM THEM DID I RELEASE THE OFFICE EQUIPMENT.
This author left out that the debt collector cannot contact you after you ask for debt information for 30 business days. Business days include Monday through Friday or the time that the courthouse is open for business and includes legal holidays.
They cannot contact you but between the hours of 8am to 9pm unless you state that they can call during other hours. They cannot talk to children and say where is your mommy or daddy. They are not allowed to talk to anyone about your debt including your spouse if his or her name is not on the debt.
They are not allowed to keep calling you and harassing you about the debt.
Do not tell a person that this is your debt at all. Get it in writing.
The author forgot to tell you that debt collectors aren't allowed to put their name or address on the envelop to you. So if you got an envelop addresses to you, open it and write them a letter asking for details which include the date of the last payment you made, the company the debt is with, your agreement with that company, the chain of title of this allege account, the 1099-C that the original creditor was suppose to have issued you by the end of the year that they sold the account, and the true legal signatures of yourself on the original application of the alleged account.
This is an alleged account because you do not know if it is indeed your account or not. Also ask for information on how they have come to conclusion that you are the right person and not another person with a similar social security number or a name sort of like the alleged account debtor.
I have been through this and did all this myself. I am not an attorney. I have won two lawsuits over these alleged accounts. If they cannot prove that this is your account then you can win a lawsuit.
make sure any letters you write to the debt collector is certified mail. It cost about $6.00. Get the return receipt that they have to sign to get the letter. This way you will know they got the letter and you can start counting your 30 days from the date of receipt of the letter.
I then responded to the summons by requesting all documents verifying the debt. The debt collector could not produce one single document showing my signature. I then informed them that I would see them in court and I requested a JURY TRIAL.
The debt collector was astonished that I wanted to go to court in front of a jury and made several more calls insinuating that I had no chance of winning. I informed him that the burden of proof was on them, not me.
Eventually, they dropped the case.
These debt collectors are bottom feeders who purchase charged off debts for pennies on the dollar and then use intimidation to scare people into paying them. Don't be fooled. If they want to play hard-ball, you throw the first pitch.
"What to do: Check the . The statute applies when the company owed the money has failed to make reasonable efforts to obtain the money owed, not when you have ignored attempts to collect. When does the clock start ticking? Usually from the date of last activity on the account, but this may vary by state."
The statute of limitations applies to "when was the last activity on the account." It doesn't matter if they have failed to contact you or if you have ignored them and been able to get away with it "live off the grid". If any debt collector tries to contact you after the statute of limitations has expired, you can do at least 2 things. 1. File a lawsuit in your county courts office (small claims), limitations not to exceed $5000. 2. File a complaint with your states attorney and with the FTC.
losers who blame everyone else for their mistakes. preacherman - dead wrong bro.
you have no clue about anything.
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