Debt Collection
Learn How The Process Really Works And The Top 10 Questions That Will Stop Them Dead!

Debt collection guide. Learn about settling credit card debts negotiation and settlement terms. This is how we stop collectors cold.

If you are a consumer and are having difficulty paying your debts, you can negotiate credit card debts with the creditor.

Sometimes the creditor will refinance or otherwise modify the payment agreement rather than pay a firm. If the creditor does turn the debts over to a agency, you do have certain rights when dealing with collectors.

If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a debtor. If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a collector.

If you dispute an item in the file a collection company has on you, you should give the collector written notice. The collectors must provide you with the necessary forms for the written notice and must help you fill out the forms if you request assistance. The debt collection agency has 30 days after receiving your written request to determine whether or not the disputed item is correct.

If the item is incorrect, it must be fixed. The collector must alert anyone who has already received a report containing the incorrect item. If, at the end of 30 days, the collector has not been able to determine whether or not the item is correct, the collector must make the change you requested and notify anyone who received a report containing the incorrect item.

If it is later determined that the item was correct after all, you must be notified and debt collection efforts may be continued. Of course, the law does not erase any legitimate debts you may owe.

Your rights under the Fair Debt Collection Practices Act.

Debt collection, What debts are covered?

A personal loan, family loans, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.

Who is a debt collector?

Debt collection 101 a collector is any person who regularly collects debts owed to others. This includes debt negotiation attorney who collect debts on a regular basis.

How may a debt collection company contact you?

Debt collectors practices a collection company may contact you in person, by mail, telephone, telegram, or fax. However, a collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. And also may not contact you at work if the collector knows that your employer disapproves of such contacts.

Can you stop debt collectors from contacting you?

You can stop collectors from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the creditor intends to take some specific action.

Please note, however, that sending such a letter does not make the debts go away if you actually owe it. You could still be sued by your original creditor.

What must a debt collection company tell you about the debts?

Within five days after you are first contacted, collectors must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.

May a debt collector contact anyone else about your debt?

If you have an debt negotiation attorney, collectors must contact the attorney, rather than you. If you do not have an attorney, collectors may contact other people, but only to find out where you live, what your phone number is, and where you work.

Collectors usually are prohibited from contacting such third parties more than once. In most cases, they may not tell anyone other than you and your attorney that you owe money.

May a collector continue to contact you if you believe you do not owe money?

Debt collectors may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debts, such as a copy of a bill for the amount owed.

What types of debt collection practices are prohibited?

Stop collector harassment. they may not harass, oppress, or abuse you or any third parties they contact.

You may stop debt collectors from contacting you by writing a letter to the agency telling them to stop. Once the agency receives your letter, they may not contact you again except to say there will be no further contact, or to notify you if the creditor intends to take some specific action.

For example, debt collection agencies may not:

  • use threats of violence or harm;
  • publish a list of consumers who refuse to pay their debts (except to a credit bureau);
  • use obscene or profane language; or repeatedly use the telephone to annoy someone.
  • False statements. Collectors may not use any false or misleading statements when collecting debts.
  • For example, bill collectors may not:

  • falsely imply that they are attorneys or government representatives;
  • falsely imply that you have committed a crime;
  • falsely represent that they operate or work for a credit bureau;
  • misrepresent the amount of your debt;
  • indicate that papers being sent to you are legal forms when they are not; or
  • indicate that papers being sent to you are not legal forms when they are.
  • Collectors also may not state that:

  • you will be arrested if you do not pay your debts;
  • they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so; or
  • actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take such action.
  • Collectors may not:

  • give false credit information about you to anyone, including a credit bureau;
  • send you anything that looks like an official document from a court or government agency when it is not; or
  • use a false name.
  • Debt Collection Unfair practices. For example, they may not:

  • collect any amount greater than your debts, unless your state law permits such a charge;
  • deposit a post-dated check prematurely;
  • use deception to make you accept collect calls or pay for telegrams;
  • take or threaten to take your property unless this can be done legally; or
  • contact you by postcard.

What control do you have over payment of debts?

If you owe more than one bill, any payment you make must be applied to the account you indicate. Collectors may not apply a payment to any bill you believe you do not owe.

What can you do if you believe a debt collector violated the law?

You have the right to sue in a state or federal court within one year from the date the law was violated. If you win, you may recover money for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees also can be recovered. A group of people also may sue a collector and recover money for damages up to $500,000, or one percent of the collector's net worth, whichever is less.

Where can you report a collection company for an alleged violation?

Report any problems you have to your state Attorney General's office and the Federal Trade Commission. Many states have their own collection laws, and your Attorney General's office can help you determine your rights.

Dealing with collectors can be one of life's most stressful experiences. Harassing calls, threats, and use of obscene language can drive you to the edge. What's worse, a collection agency may embarrass you by contacting your employer, family or neighbors.

You may even be hounded to pay a account that is not rightfully yours. Sure, debt collection agencies have a job to do. Even so, there are limits on how far a collector can go.

Military members should make an appointment with the local Judge Advocate General's office if contacted by a collector. The Service members Civil Relief Act (SCRA), previously the Soldiers' and Sailors' Civil Relief Act (SSCRA), provides protections for military members whose financial life is affected by military service.

Visit the Department of Army's web site for information on how the SSCRA applies to military members http://www.defenselink.mil/ra/mobil/pdf/scra_info-paper.pdf.

You can visit the Better Business Bureau's website www.BBB.org and find reports on hundreds of debt collection companies.

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