Dealing with Debt Collection

Ever being hounded by debt collection calls and trying to figure out on dealing with debt collection?  Did you know it’s their job to make you angry or terrified, and they do it well? They know if they can get you all worked up that you will act on that feeling and do something stupid, such as paying them instead of buying foods for your family.

There are quite a few misunderstandings out there regarding dealing with debt collection agencies. Some people think the debt collector may come to their house and demand for payment; others think they can be thrown in jail if they do not repay. However, neither of these is true. Debt collection agencies are, in fact, pretty limited as to what they can do legally.

Debt Collection Laws

The Fair Debt Collection Practices Act was passed in 1977 to protect consumers from abusive debt collectors and help them deal with debt collection. Have a closer look at the rules that a debt collector must follow when collecting a debt.

You have the right to sue debt collectors within one year from the date the debt collector violated the law.

Debt Collection Agency

Debt collection agencies are usually the last resort for your creditors. If you fall behind on your bill, like a credit card payment, the creditor will usually try to get you to pay off your account by sending you letters and calling you. If this fails for a few months or longer than the lender is comfortable with, they will often turn your account over to a debt collection agency.

The debt collection agency will either work on behalf of your creditor by trying to get the money owed to them, or the agency will buy the debt and try to collect it themselves. For example, if a credit card company is unable to collect on a $8,000 debt, they may be willing to sell it to a collection agency for $2,000. The credit card company comes out ahead because they at least got some money and the debt collection agency then tries to get the debtor to pay the full $8,000, earning them a nice profit.

Debt Collection Procedure

Here are some steps that Debt collection agencies may take while trying to collect payments from you.

  • Sending letters to demand the payment
  • Making debt collection calls to your home, cell phone or even at work
  • Reporting to the credit bureaus
  • Filing lawsuits against you

Debt Collection Harassment

Debt collectors may not harass, coerce, and abuse you or any 3rd parties they contact. For instance, they may not:

  • Use threats of violence or harm
  • Publish a list of names of debtors who refuse to pay their debts
  • Use obscene or disrespectful language
  • Repeatedly use the phone call to annoy debtors

Understanding your right and the debt collection rules and restrictions while dealing with debt collection is definitely helpful and it can also reduce the stress you already have.