Dealing With Debt Collectors
Unfortunately debt collectors are often less than ethical. This has caused the government to pass legislation to protect you from unethical collection methods.
If the debt you are being contacted about is accurate then you should ask for debt validation. We suggest you do this in writing.
Failure to ask for validation by mail will result in your validation being completely ignored. Additionally send your validation letter certified mail so you have proof that they received it.
If your debt is validated and it is within the statute of limitations of your state then you can negotiate payments. Limitations are often seven years from the date of delinquency.
When negotiating payment you should never pay the full amount. This is because your account has been purchased from the original creditor for pennies on the dollar. Thus we suggest you start your offer at 50% of the balance.
The agencies will always accept partial payment. This is because there only way to recoup the money they spent on your account is by accepting your payment or selling it for a fraction of what they paid for it to another agency.
When you agree on a settlement payment you should get in writing from them that in exchange for your payment they will not report any derogatory information to the bureaus. If you do not do this you will stop the phone calls, but you will have a whole new set of problems because of a poor credit score.
Also if you just pay the debt it will be reported as a paid collection. This is still a very bad mark on your credit report and will not improve your score.
I repeat you must get in writing that no negative information is going to be posted to your report regarding the debt. In a rare case that negative information has already been reported you must get them to agree to erase it from your report.
If you do not do this there is zero benefit from paying the collection. Additionally always pay with a paper check. FYI, you can actually use the memo line to repeat the contract regarding reporting to the bureaus, then when the check is cashed you will have a binding contract.
If you are being harassed by a collection agency you are not alone. Additionally they only can legally do so much. The Fair Debt Collections Practices Act says that a debt collector can not;
- Threaten legal action (arrest, jail)
- Constant harassing calls
- Call your job (once asked not to)
- Claim to be anyone they are not
- Threaten to sue (unless they are taking legal action)
- Threaten to garnish wages or seize property (each state is specific about what is legal, often a court order is needed)
- Call your neighbors or family members and speak with them about your debt
- Only call between 8am and 9 pm
- Call you after you have notified them that you will not accept calls regarding this debt.
Often these regulations are ignored. If you have been a victim you should report the agency to the FTC and the Attorney General. A majority of collection agencies have been fined because of violation of the FDCPA.
Also you can file a lawsuit against the collection agency and be awarded monetary damages. Make sure to keep all communications in writing in order to prove they are in violation.
If the debt you are being contacted about is accurate then you should ask for debt validation. We suggest you do this in writing.
Failure to ask for validation by mail will result in your validation being completely ignored. Additionally send your validation letter certified mail so you have proof that they received it.
If your debt is validated and it is within the statute of limitations of your state then you can negotiate payments. Limitations are often seven years from the date of delinquency.
When negotiating payment you should never pay the full amount. This is because your account has been purchased from the original creditor for pennies on the dollar. Thus we suggest you start your offer at 50% of the balance.
The agencies will always accept partial payment. This is because there only way to recoup the money they spent on your account is by accepting your payment or selling it for a fraction of what they paid for it to another agency.
When you agree on a settlement payment you should get in writing from them that in exchange for your payment they will not report any derogatory information to the bureaus. If you do not do this you will stop the phone calls, but you will have a whole new set of problems because of a poor credit score.
Also if you just pay the debt it will be reported as a paid collection. This is still a very bad mark on your credit report and will not improve your score.
I repeat you must get in writing that no negative information is going to be posted to your report regarding the debt. In a rare case that negative information has already been reported you must get them to agree to erase it from your report.
If you do not do this there is zero benefit from paying the collection. Additionally always pay with a paper check. FYI, you can actually use the memo line to repeat the contract regarding reporting to the bureaus, then when the check is cashed you will have a binding contract.
If you are being harassed by a collection agency you are not alone. Additionally they only can legally do so much. The Fair Debt Collections Practices Act says that a debt collector can not;
- Threaten legal action (arrest, jail)
- Constant harassing calls
- Call your job (once asked not to)
- Claim to be anyone they are not
- Threaten to sue (unless they are taking legal action)
- Threaten to garnish wages or seize property (each state is specific about what is legal, often a court order is needed)
- Call your neighbors or family members and speak with them about your debt
- Only call between 8am and 9 pm
- Call you after you have notified them that you will not accept calls regarding this debt.
Often these regulations are ignored. If you have been a victim you should report the agency to the FTC and the Attorney General. A majority of collection agencies have been fined because of violation of the FDCPA.
Also you can file a lawsuit against the collection agency and be awarded monetary damages. Make sure to keep all communications in writing in order to prove they are in violation.
About the Author:
For a free credit consultation call 1-866-246-7311. Additionally you can get free Credit Repair Letters used to dispute negative information or a free credit repair e-book by visiting us.
posted by Debt Consolidation Loan at
2:35 AM
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