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About The Statute Of Limitations And Your Old Debts

payment overdueOld debts can still be a pain. It can still haunt you for as long as it remains unpaid. It is either you pay it off, settle it or suffer the consequence of having debt collectors call on you to pay what you owe.

This is where the Statute of Limitations on debts come in. This is like an expiration date for your credit accounts. The time varies per state but it usually means that if your debt reaches beyond this time frame, no debt collector can win in a legal court against you. That is because you can use this as justification for not paying it. Even the original creditor whom you owe this debt to cannot win in court as long as your old debts have already gone past the statute of limitations.

This law does not remove your responsibility to pay back the debt. It is also known as a “time-barred” debt. Although you can use it as justification for leaving it unpaid, it will always remain to be your debt. You can still pay it off if you wish but most people will not do so.

If you have any old debts, you may want to understand how to use the statute of limitations to your advantage.

What does the statute of limitations say about old credit accounts

One of the most important protections that you can get from the statute of limitations is being abused by a debt collector. Although the Fair Debt Collection Practices Act (FDCPA) prohibit abusive debt collection for all types of credit, some states have made it illegal to collect old debts that are past the statute of limitations.

Here are some of the important facts about this that you should know.

There are two debt expiration dates.

When it comes to old credit accounts, it is important for you to define two important expiration dates.

  • Credit Reporting Time Limit. This is the time when your debt is removed from your credit report by the major credit bureaus. The general rule is that after 7 years, all of the old credit in your history will be removed. This excludes debts that are discharged by bankruptcy because that usually takes 10 years before it can be removed from your credit report. The longest debts that will be removed from your report are tax liens – which can stay there for up to 15 years.
  • Statute of Limitations. The other expiration, as we have been defining, is the one that will discourage debt collector from suing you in court for old debts. This is separate from the credit reporting time limit. Even if your debt is still in your credit report, as long as it is past the statute of limitations, both the original creditor or debt collector cannot win in court against you.

The statute of limitations vary per state.

First of all, you need to know the specific time frame in the state where you owe that debt from. Even if you moved, the time frame that you need to follow is the state where you borrowed the money from. For instance, you acquired the debt in Texas where both written and oral debt contracts expire in 4 years. Even if you moved to Louisiana (where the time frame is 10 years) your old debts will still follow the expiration of 4 years. You can view the statute of limitations per state online. There are website like NOLO.com that provides a complete list.

When does the time frame begin.

One of the most confusing parts about the statute of limitations is when will you know if your debt is already expired. This starts on the last date of activity that you have made on your credit account – not the due date. Do not confuse it with the date when your debt officially goes to default. If your last payment was March 2010, your debt usually goes to default after 90 days – which is on June 2010. If you live in Texas, your debt will go past the statute of limitations by March 2014 and not June 2014.

It is possible to restart the statute of limitations.

This is what debt collectors would want to happen. You have to be careful about what you say when you are talking to them about old debts. If you know that your credit is past this time frame, you should not feel intimidated by the threats that they will make. If you make a payment, promise to pay the debt, go into an agreement to pay it back or reuse the credit account, your statute of limitation will restart. When that happens, the debt collector now has a fighting chance when they sue you in court for that debt.

Not all debts are covered by this law.

Be careful about using this as justification that you do not have to pay back a debt. There are certain credit types that are not covered by this. These include child support, income taxes and federal student loans. When you are sued in court for these, the statute of limitations cannot protect you.

3 things the law about old credits will not do

It is important to note that while the statute of limitations will release you from the legal obligation to pay back unpaid old debts, there are certain things that it cannot do. Here are three important aspects of your debt that it cannot help you with.

  • It cannot stop the debt collector from suing you in court. You can use it to keep them from winning but if the collection agency decides to file a case against you, this is not illegal for them to do. It will bring you a lot of hassle of course, and that is probably what they want to happen. Their intention is still to intimidate so make sure you know the law enough to keep yourself from making any rash actions to restart the statute of limitations.
  • It will not erase the debt. Even if you are legally obligated to pay it back, you still have the moral obligation to do so. It will forever be your debt and it is up to you and your conscience to live with the fact that you left the debt unpaid.
  • It will not keep the debt from being included in your credit report. As long as it is not beyond the 7, 10 or 15 year mark, this credit account will remain in your credit report. It will continue to bring your credit score down – although the longer it stays there, the less impact it will have. But it will still be a stain on your records.

Be careful about zombie debts

The knowledge of the statute of limitations on old debts will help protect you from the burden of zombie debts. You have to know that there are certain practices wherein debt collectors will purchase unpaid credits from creditors and lenders. According to an article published on BloombergView.com, there are debt collection agencies who buy these debts for pennies on the dollar. Then, they call up the list of debtors, hoping that they know nothing about the statute of limitations. But even if these debtors know about it, these collectors will go through abusive methods to intimidate, threaten and harass consumers so they end up paying off the debt anyway. At the very least, they will try to trick you into restarting the statute of limitations.

Well there are certain ways to deal with zombie debt collectors and here are some tips that we have for you.

  • Always ask the collector to send you a written notice about the debt.
  • Ask them to validate the debt and send you a document proving that you owe it.
  • Make sure you are already past the statute of limitations before you decide to do anything.

When you have confirmed it is an old debt, there are two things you can do.

First option is to send them a letter asking the collector not to call you again. The FDCPA states that they should honor this if you requested it. However, that will not stop them from selling your old debts to another collection agency so the process will start again.

The second option, if you want to avoid the consequence of the first, is to check your finances if you can try to settle the debt. These companies bought your debt for pennies on the dollar so they should not mind you paying lower than what you really owe. They will still make profit from it. Remember that getting into a settlement agreement will restart the statute of limitations but if you get a good deal, it can stop future collectors from ever calling you again.

What Happens If You Just Ignore A Debt Collector?

man shouting at phoneIf you’ve ever had a debt turned over to a collector you already know how bad things can get. We’ve heard stories of people who were hounded multiple times a day – both at home and at work – had their relatives contacted and were dragged into court. Unscrupulous debt collectors can and will make a debtor’s life miserable until he or she finally gives in and pays up.

The dirty, little secrets of debt collection

Why will most debt collectors stop at nothing until they get your money? The first dirty little secret of debt collection is that most collectors are paid on commission. If they spend several hours hollering at you, threatening and harassing you without colleting anything they’ve basically worked free. What this means for the collector is that the bigger the bill the better. In many cases the agency will get a bounty of 10% to 50%, which is usually split with the collector. Top collectors can earn as much as $10,000 a month.
The second dirty, little secret of debt collection is that agencies generally buy debts for pennies on the dollar. In other words, the collection agency might have purchased your $1,000 debt for $20 or less. This gives the collector room to negotiate and still earn his or her commission. This means that in many cases, you could probably settle that $1000 debt for $500 or less.

You  can run but you can’t hide

Today’s technology has had two impacts on debt collection – one good, one not so good. First, if you have any kind of caller ID you can check your incoming calls and if it appears to be from a debt collector, just ignore it. That’s the good part. The bad part is that it’s almost impossible to run away from a debt collector – even by changing your phone number.

In the event you have a debt you feel you just can’t pay, you could stonewall the collector by ignoring all of his calls. Legally speaking, you do have the right to ignore a debt collector but it’s important to understand that this doesn’t make the debt go away.

A number of different scenarios

If you decide to ignore a debt collector, there are several different scenarios that can occur. First, the collector could just leave you alone. Maybe he simply can’t find you and has quit trying to track you down. While this could happen, it’s not something to count on.

Your credit will suffer

When you have a debt go to collection, your credit score will be seriously damaged. It will appear on your credit reports regardless of whether you try to work with the debt collector or not. However, if you do talk with the collector, you at least have the opportunity to explain what the problem is and to try to work something out.

The debt could grow

Just because you don’t pay on a debt doesn’t mean that the interest will go away. Depending on the contract that the collector has with the creditor and your state’s law, the agency may be able to add interest and collection costs to your debt. Some debtors have reported that their debt actually doubled over time.

You may be bounced from one agency to another

Just as lenders sell debts to collection agencies, the agencies sell debts to one another. If the first collector that contacts you is unsuccessful at collecting the debt, it could wind up at a different agency. And this could happen multiple until you give up and pay the debt.

People you know may be contacted

In the event that the debt collector tries to reach you and is unsuccessful, the law allows him to reach out to third parties such as your neighbors, relatives or your employer – but only to find you. The law doesn’t allow a collector to disclose the fact that you owe a debt or to discuss your finances with other people. However, it can still be very embarrassing if the person the collector called starts asking you pointed questions like, “why did this collection agency contact me?”

You could be sued

If you fail to communicate with a debt collector it may leave the agency with no option but to sue you. While it is possible to successfully defend a debt collection lawsuit, it’s very difficult. And if the agency is successful in court, it can get a judgment entered against you. This in turn would allow the collection agency to garnish your wages or even go after your bank account.

The stress will increase

Trying to dodge a debt collector can leave you feeling very stressed out. It can be scary or frustrating to talk with a debt collector but the alternative – which is not to talk to him – can be just as stressful. If you call the debt collector, this is the friendliest aspect of debt collection because at that point he will want to work with you to try to resolve the debt. The bottom line is that if you have an unresolved collection account, try to decide on your approach and then pick up the phone – or write a letter – so you can put the debt behind you. Also, because collection accounts have such a dramatic impact on your credit score, it’s a good idea to get your free annual credit report to see whether or not you have any outstanding collection accounts. You should also be sure to monitor your credit scores every month.

Tips for negotiating with creditors

If you take a call from a debt collector, he or she will have no interest in why it is that you can’t pay the bill. But if you’re in a hardship situation, the collector does need to know this and what it is you’re doing to get back on track. You should have a story ready and then stick to it. This could be just a few sentences that you can use consistently when you talk to a creditor. For example, “I was very ill, out of work for two months and now I am trying to get caught up.” Or “my husband was laid off and I’ve taken a significant cut in pay. He’s looking for a job so we can catch up but we don’t have any money right now.”

Don’t be a drama queen

You’ll get nowhere with a debt collector if you lose your temper. It’s important to stay calm and not lose your cool. If you find yourself losing your temper, just tell the collector you will need to talk with him later and then hang up. In the event that you have to talk with that collector again, tell him you would like to record the conversation. This usually keeps collectors on their best behavior.

Ask the right questions

If the collector threatens to sue you or that you’ll lose some property if you don’t pay up, ask for specifics: “When will I be notified of the lawsuit?” Or “When will the money be taken from my bank account?” Some of these threats may be a illegal and the more information you have the better.

Be sure to take notes

Whenever you talk with a collector, have a pen and paper handy so that you can take notes. Be sure to write down the name of the person you talk with, what was discussed and when you talked. This will not only take much of the emotion out of the deal but you will also have a record if the collector broke the law when attempting to collect from you.

Know exactly what you can afford to pay

Sit down with a notepad or spreadsheet and go over your expenses and income very carefully. Figure out exactly what you could afford to pay and agree to pay only a realistic amount. In general, if you can come up with a lump sum amount to resolve the debt, you’ll get the best settlement. If you can’t do that, you may have to agree to a payment plan. In this case, you’ll probably pay more over time. If you do agree to a payment plan, make sure you know the total amount you will be required to pay.

Deal with creditors and not collectors

What’s best is to try to work out an agreement with your creditor or creditors before your bill(s) is sent to collection. If you make late payments this will affect your credit score and credit reports, but collection accounts will do even greater damage. You should know that it’s a myth that so long as you are paying something towards a debt it can’t be turned over to a collection agency. Also, understand that once a debt is sent to collection, you have no choice but to deal with the collection agency.

Get it all in writing

If you do agree to a payment arrangement or settlement agreement, get everything in writing before you pay a cent. If not, the terms can change and it will be your word against that of the collection agency. There have been many cases where consumers were hounded for balances they thought they had resolved years before.

Finally, here is a video courtesy of National Debt Relief with some good tips for dealing with debt collectors.

What You Need To Know About Zombie Debts

man chained to a debt ballThe debt collection industry is a nasty business indeed. While there may be legitimate companies out there who are trying their best to follow the rules, you cannot erase the fact that the abusive ones outweigh the good ones.

There are many things that debt collectors don’t want you to know and one of them are known as zombie debts.

What are zombie credit accounts?

What exactly are zombie debts? These are old debts that had been abandoned by debtors, creditors have given up on and have passed the statute of limitations. When a debtor fails to pay their credit obligations and the 6th month mark had passed, this is usually charged off by the credit company. This means they have given up on collecting profit from that debt. It will be written off as a loss on their books. When the debt passes the statute of limitations, that debt will be considered uncollectable.

This is where debt collectors come in. A lot of them purchase these old debts for a very low price. What they will do is try to chase down the consumers who owe the money. If they convince the debtors to pay even a part of the debt, they will be getting some huge profits for it.

But here are a couple of important facts that you need to know about zombie debts.

  • Most of these zombie debts are past the statute of limitations.

  • Debt collectors wish to earn profit from this because they can buy the debt at a very low price from the original creditor. The low price is because the debt is considered uncollectable already.

  • When a debt is past the statute of limitations, you are still responsible for the debt you owe. The collector can still collect the debt but they are allowed to file a legal suit against you – in case you refuse to pay up.

  • Debt collectors will trick you into acknowledging the debt because it will restart the statute of limitations. That means they will regain the right to collect and sue you for that debt amount.

  • Some people give in because of the pressure from the abusive and harassing behavior of the collector. In that case, the collector wins and profits from the whole event.

It is with these zombie debts that debt collectors get their notorious reputation. You have to understand that they will drive you to feel guilty, threaten you with a lawsuit, and telling you all sorts of bluffs. If you know that you are past the statute of limitations, you will know that these are just words. If you make just one payment, it ceases to become a zombie debt and it will be considered as a fresh debt on your credit report. Instead of being pushed past your credit report as an old debt, it will be reflected once more and can ruin your credit rating.

Most people will think that old debts should be ignored but you must not just into conclusions. There are things that you need to know about your debts before you make the decision not to act on this.

What to do when your are being collected for an old debt?

When you are called by a debt collector for a zombie debt, here are the things that you need to do.

  • When you receive a phone call, and you know that it is a debt collector asking you to pay for an old debt, you do not have to say anything or give out any information. Never acknowledge the. Instead, simply ask for the address of the collections agency.

  • Send that collections agency a formal letter asking them to verify the debt that one of their collectors called you for. Make sure there is a return receipt so you have proof of when their received your letter.

  • You should not receive any calls or communication efforts until the collector has sent their response.

  • If they send back a response, keep it safe.

  • Send a dispute letter if the debt is not yours. Ask them to show proof that the debt is yours. Until they do, you should not be bothered with the debt.

  • If they persist, you can send them a letter asking them to stop calling or communicating with you unless it is to tell you that they will be filing a lawsuit against you. If the debt is beyond the statute of limitations, you should not hear from them again.

It is very important that you educate yourself about the FDCPA or Fair Debt Collection Practices Act. You can get information about this law from the Federal Trade Commission (FTC) website.

The FDCPA provides consumers with the following issues:

  • The collector cannot sue you over a debt that had been inactive for six years – in some states, even less.

  • Inactive debts must also be removed from your credit report after 7 years.

  • Debt collectors are prohibited from providing false information, or delivering threats that are only meant to scare you into paying a debt.

  • Any cease and desist letter from the debtor must always be honored.

  • Collectors are not allowed to report a zombie debt to credit bureaus.

In case the debt collector is in violation of these laws, you have every right to file a complaint against them. You can do it through the FTC website, the Better Business Bureau or the local office of your State Attorney General.

This Is How You Should Treat Debt Collectors

collector holding a past due documentWhen you are behind on your payments, you can certainly expect that collection calls will start to pour in. It doesn’t really matter if you have a big debt or not. The process is the same and no one enjoys these exchanges anymore than you would a recurring sickness.

Debt collection calls can make your life miserable. That is the reason why you need to know the intelligent way to handle these debt collectors. If you are not careful, you may be persuaded to do something that is not to your benefit and you can end up in a worse situation than when you started. It pays to know the right way that you can talk and deal with these debt professionals.

Dealing with collection calls

The best way to deal with a collection call is by having the right attitude for it. You have to understand that although the economy had a hand in your financial difficulty or your ex-spouse put you in debt, the debt is still under your name. Unless you had been a victim of identity theft, it is your responsibility to pay off your debt. Here are some of our suggestions when you are dealing with debt collectors.

  • Be polite. Debt collectors can be rude. There is no doubt about it. They are driven to get you to pay for what you owe and that can make them say really nasty things. But even if you know that these people have that tendency, that does not mean you should not be polite when you start the conversation. Sometimes, there are collectors who will respond with the same courtesy that you will show them. They may even be cooperative in helping you pay off your debts.

  • Be patient. The longer you drag the debt collection, the better it will be for you because the collector will be more desperate to get money from you. Once your debt is beyond the statute of limitations, they can no longer take you to court for that particular debt. Just be patient and keep your emotions in check so the collector will not have the power to stress you out.

  • Be consistent. If you are unable to pay your debt because of a financial crisis or an illness, stick to that story. You don’t have to embellish your story if you really cannot afford to pay your dues.

  • Be on your guard. Most of these collectors will tell you things that will really wind you up. You have to be on guard and you need to check if the collector is really who they say they are. Get their details and make sure that you take note who you are calling, the company they are working with and the original creditor of the debt being collected. Have them verify your debt to ensure that it is really yours. Make sure to call the creditor too so you can check that the collector has the right to collect on your debt with them.

  • Be prepared. There are ways for you to prepare for collection calls. This preparation will help keep you from being too intimidated by what will be said to you. Do not take these calls lightly because a lot of people end up with unbearable stress caused by debt collectors.

How to prepare when debt collectors start calling

Technically, there is nothing wrong with the job of a debt collector. We still encourage that the above mentioned traits be enforced but you need to know that there are debt collectors out there who are really out to break you. While it cannot be said about all debt collectors, they are given a bad name nevertheless. There are debt collectors who are trained to use only the best debt collection practice and some of them really follow through. However, know that these professionals are not angels. Here is an interesting video from ABC News about audio tapes bearing the proof of bad debt collection practices.

There is really nothing that you can do about these except to prepare for the collection calls. Here are some of our suggestions.

  • Know your rights. As soon as you know that you cannot afford to make your payments, you have to learn what the Fair Debt Collection Practices Act say about you. FDCPA for short, this law states how debt collectors must and must not collect from you. This will help you determine when they are bluffing or crossing the line.

  • Know your debts. There are debt collection agencies who buy out old debts from creditors. To avoid being tricked to pay something that you never should, you have to know your debts. Identify if there are debts that are past the statute of limitations or if you are being harassed for a debt that you did not make in the first place.

  • Know your debt relief plan. Regardless of how financially hard up you are, you need to start considering a debt relief plan. You have to pay off your debt somehow. If it involves a simple restructuring of debts or a more significant debt reduction, you have to choose a plan to get out of your credit problems.

In the end, your knowledge of the whole thing and your rights as a consumer will help you deal with abusive debt collectors. You can explore more of your rights by visiting the Consumer Financial Protection Bureau (CFPB) website.

A Debt Collection Company Is Punished For Its Behavior

Woman talking on the cell phoneHave you been harassed by a debt collection company? It’s not bad enough that you’re deeply in debt and fighting to keep your head above water, but in addition you are being bombarded with nasty phone calls – some of which can come both night and day. The debt collector may be threatening to talk with your employer, file suit or have your wages garnished.

There is some justice in this world

An article appeared recently on the website CNN Money reporting that the debt collection company Expert Global Solutions of Plano Texas had been fined $3.2 million by the Federal Trade Commission for harassing consumers. It had been found to be using abusive practices such as calling people several times a day, late at night or early in the morning, and even at their place of employment. There were actually instances where the collectors continued calling people even after they had paid their debts because they had not bothered to verify that the debts still existed.

The world’s largest

Expert Global Solutions is the world’s largest debt collection company. It has, if you can believe this, about 32,000 employees and enjoys $1.2 billion in annual revenues. According to the FTC, “the company’s debt collectors called persons repeatedly or continuously with the intent to annoy, harass or abuse.”

What to do if you’re contacted by a debt collection company

There was a classic movie some years ago where at one point the lead actor yelled, “I want you to get up right now and go to the window. Open it, and stick your head out, and yell, ‘I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!’

The good news is that if a debt collector who has made you mad contacts you, you don’t have to take it. A few years ago our Congress passed a bill called the Fair Debt Collection Practices Act. It prohibited debt collectors from using certain kinds of abusive behavior including:

• Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time
• Failure to cease communication upon request
• Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number.
• Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer
• Contacting consumer known to be represented by an attorney
• Communicating with consumer after request for validation has been made:
• Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt
• Publishing the consumer’s name or address on a “bad debt” list

Asked for verification

The first time a debt collector contacts you, make sure you request that he or she validate the debt. He must do this in the form of a letter and within five days. This letter must include the fact that you have the right to dispute the debt’s validity and that you have 30 days to do so. You can dispute the entire debt or part of it or ask for the name of the original creditor. Once the collection agency receives your letter, it cannot contact you again until it has provided you with the information you requested.

Use certified mail

If you decide to send a letter disputing the debt, be sure to send it certified and with return receipt requested. This way you will have proof that you mailed the letter and that the collection agency received it.

With the collection agency must do

When the collection agency receives your letter, it must send you proof that it either owns or has been assigned your debt by your original creditor. This verification must show that you actually owe the debt, the amount of the debt and include documentation from the original creditor. The law mandates that it is not sufficient for the agency to just send you a print out of the amount you owe.

If you do not receive verification

In the event that the collection agency does not send you the required verification within 30 days, it can no longer collect the debt from you. If it lists your debt with one of the three credit bureaus, you can dispute it with the appropriate bureau. You will need to send the bureau a copy of your debt validation letter, and copies of your certification and return receipt. This should help get that debt immediately removed from your credit report.

Upset man with hands on headStopping the harassment

You can also prevent a collection agency for from harassing you by sending it what’s called a “cease and desist letter.” (You can find samples of this letter online.) According to the FDCPA once the collection agency receives the letter it can contact you only once more – either to tell you it will no longer be contacting you or that it will be taking some specific action such as filing suit. You will need to send this letter registered and return receipt requested – again to prove that you mailed it and that the collection agency received it.

Check out this video for more information about handling calls from debt collectors including what you shouldn’t say.

Debt Collection And The Intelligent Way To Handle Debt Collectors

man shouting at phoneDid you know there are only three ways that creditors can collect your debt? They can retain a collection agency, get a collection attorney or charge-off and sell your account.

A collection agency

In most cases, collection agencies get a commission on the debts they successfully collect. In fact, most will get 25% to 50% of whatever they can recover.

The collection attorney

When it comes to collecting debts, a collection attorney is the same as a third party collection agency and guided by many of the same rules and regulations as specified by the Fair Debt Collection Practices Act (FDCPA). Of course, an attorney can pursue legal action against you but does have to abide by the same FDCPA rules.

A debt purchaser

When it comes to older or seasoned debts, the standard procedure is for the lender to sell them off to a debt purchaser. Many creditors will package up thousands of accounts and millions of dollars worth of debt and then sell them to the highest bidder. When one of these companies purchases your debt, they become the new owner and must adhere to the same collection laws as a third party.

Don’t make this mistake

If a debt collector contacts you, don’t make the mistake of talking to him without knowing your rights. There are unscrupulous collectors who will lie or try to intimidate you. They are seriously motivated because their compensation is usually based on a percentage of the debts they can collect. They will do and say just about anything to manipulate you into paying your debt. For example, don’t believe any debt collector who says that your only option is to pay your balance in full. This is hardly ever the truth and you almost always have options.

Stop harassing calls quickly

While debt collectors have the right to try to collect from you, they never have the right to harass you. If you know the FDCPA, you can stop any harassment and even phone calls from collection agencies entirely.

Turn the tables

First, you could turn the tables on any debt collector by obtaining as much information from him or her as possible. You can ask questions such as “who did you say you were and what is your company”. You can ask what state the collector is located in and how you supposedly incurred the debt. You can use language such as “according to the FDCPA…” which alerts them to the fact that you are aware of your rights. Or you could say “I do not recall this debt” so the collector is forced to validate it.

Send a cease and desist letter

If this doesn’t stop the phone calls, you need to send a cease and desist letter to the debt collection agency. This letter should include the demand that the agency stop calling you at home, on your cell phone, at work or at any other location. You should send the letter as registered and return receipt requested so that you will have proof that the collection agency actually received it.

Opt for debt settlement

If you’re up to your neck in debts, a better alternative for dealing with them is to opt for debt settlement. Call our toll-free number and let us explain how debt settlement works and how you could benefit from it. Thousands of American families have let us settle their debts and save them thousands of dollars in the process. Plus, we charge nothing up front so you have nothing to lose by giving us the opportunity to help you.

What To Do About Those Abusive Debt Collectors

man shouting at phoneSometimes it may be hard to remember that debt collectors are people, too. Just as there are good and bad used-car salespeople and good and bad insurance agents, there are good and bad debt collectors. The good ones will contact you maybe once during the day and will be polite and well mannered. On the other hand, the bad ones will call you day and night, scream at you, call you names and make nasty threats including the threat to contact your company and have your wages garnished.

What the law says

Several years ago, Congress passed a law called the Fair Debt Collection Practices Act. The purpose of this law was to stop debt collectors from harassing you. It says that they are to contact you only between the hours of 8 AM and 9 PM unless you agree to let them contact you outside those hours. They are not to contact you at work if they are told either in writing or orally that you are not allowed to receive calls there. The law also states that a debt collector is not allowed to contact anyone else about your debt except to get information about where you live. It is also not to use threats of violence or obscene language.

You might want to talk with the collector one time  to see if the issue can be resolved. This is true even if you don’t feel that that the debt is yours, if you are unable to pay it immediately or if you think the collector had made a mistake in contacting you. If after you first talk with the collector you decide you don’t want any further contact, you can tell him or her this but you will need to do it in writing.

Here’s what to do

You need to send the collection agency what’s called a cease and desist letter – to stop contacting you. Make sure you send the letter certified mail and “return receipt requested” so you can prove that the collection agency received your letter. You should also keep a copy for yourself.

Once your letter is received by the collection agency, the collector is not contact you in the future with two exceptions. First, it can contact you to tell you it won’t be contacting you again, and second to tell you the creditor intends to take a certain action such as filing suit. While sending a cease-and-desist letter to a debt collection agency won’t get rid of your debt, it should stop the agency from contacting you. Of course, your creditor or the debt collection agency can still sue to collect on your debt.

Unscrupulous debt collectors

Unfortunately, there are unscrupulous debt collectors who pay absolutely no attention to the Fair Debt Collection Practices Act. If you are being harassed by one of these people, you can report the company to your state’s attorney general’s office. Alternately, you could get an attorney and sue but only for a maximum of $1,000. Some of the really unethical collection agencies have corporate headquarters outside the US – so you probably wouldn’t be able to collect a cent from them.

You could change phone numbers

If you think that going to the Attorney-General’s office or hiring a lawyer would be too much of a hassle, you could change your phone number. However, the debt collection agencies are extremely good at tracking people down who change their phone numbers so you might get only a few weeks of respite from the calls.

Use debt settlement instead

An easier solution might be to hire us to settle your debts. Once you contract with us, we contact all of your creditors and debt collection agencies and put them on notice that we are now representing you and that they are no longer to contact you. We may be able to help you slash thousands of dollars off your credit card accounts and help you become debt free in 24 to 48 months. Learn more about debt settlement and why it might be your best alternative. Start a chat or call us today for complete details.

What To expect If A Debt Collector Takes You To Court

Judge in robe sitting at bench looking serious I read a story recently where a creditor took a woman to court about credit card debt that she had incurred in 2006. It was in her name alone and not in her husband’s name. The debt collector wanted $1,500 plus costs –from a woman who was living on disability and Social Security, plus a small pension.

The good news

She was advised to immediately check the laws in her state as it’s possible that the statute of limitations had expired on the debt. She could learn this by visiting her state attorney general’s website. The statute of limitations on written contracts in most states is six years, which includes credit card debt. If this were the case, the woman’s creditor might be just getting in under the deadline. However, it would certainly be worthwhile for her to find out.

If a debt collector drags you into court

If you should be sued by a debt collector that’s the first thing you should do–check and make check out the statute of limitation on debts in your state.. If it has expired you will just need to prove in court the account’s age and that it’s no longer collectible. You will need to show the judge your paperwork on the account or documents from the collection agency with the date of the debt and the name of the original creditor.

If the debt is collectible.

If you feel that the debt is valid, it could still be worth it to appear in court. The bad news is that if the debt is valid, the judge will probably find in favor of the collector. If this happens, your day will be over as the the court will issue a judgment in favor of the collector for the amount you owed.

However, if you are present you might be able to show the judge that your financial situation was just so bad you would be termed “judgment proof.” To do this you would have to show the court proof that your financial situation was just awful. Three months’ worth of bank statements should probably be enough to make your case. You might want to contact your local legal aid society to see if you could get a pro bono (free) lawyer to help.

If the collector is awarded a judgment

If the collector is awarded a judgment, he can use it to garnish your wages, put a lien on any real property or garnish your bank account to collect the debt. Retirement benefits including Social Security are usually exempt from garnishment–if you don’t owe taxes or child support.

Your spouse might also be responsible

If you live in a community property state such as California, Arizona, Alaska, Louisiana, Nevada or Texas your spouse may also be responsible for your debt under community property laws. However this would be true only if the debt was incurred after you were married.

A better way to handle debt

A much better answer than waiting to be sued and dragged into court over your debts is to let us help. We are a debt settlement provider who can negotiate with your creditors to get your debts reduced as much as possible. We provide a 100% satisfaction guarantee as we are so confident that we can help you achieve your goal of becoming debt-free in a reasonable time, that if you are ever unsatisfied with our debt relief program you can cancel at anytime without any penalties or fees.

Don’t get dragged into court. Contact us by email, phone or live chat so we can start helping you immediately.

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