Dealing with a debt collector can be very intimidating.
Here are some tips how to deal with them:
Someone has said that the word FEAR really stands for:
- Evidence, that
Living under the financial stress that comes from dealing with too much debt can be one of the most traumatic experiences anyone can face!And if that wasn't bad enough, now you have debt collector calling day and night!
It's time to eliminate that fear that comes from dealing with debt collectors!
The Fair Debt Collection Practices Act protects all consumers from the unlawful tactics used by some (not all) debt collectors.
Although the FDCPA covers many things that debt collectors can and more importantly, CAN'T DO, here are some of the most important for you to know:
They cannot call you dozens of times a day or before 8am or after 9pm.
They cannot harass, threaten or try to deceive you.
Although they can contact family and friends, they are prohibited from revealing anything about you debts or situation. They can only contact them for your address, phone or work number.
And about contacting you at work...You can stop that by telling them you cannot take personal calls at work. If they call again, you have a legal right to file a claim with your state's attorney general's office or even contact an attorney to bring charges!
They cannot threaten you or insinuating that you could be arrested, etc.
But, what most people are afraid of is that somehow they can take your stuff or money in the bank, wages, or make you sell your home.
You have to understand the legal process a debt collector must go through to really understand what they can and cannot garnish or levy.
Although I've been helping people solve their debt issues for a long, long time, I am not an attorney, so don't take anything I say as the advice from a legal authority!
Having gotten that out of the way....
While your debt is with the original lender, they have the legal right to call you about it. Now, the same FDCPA rules apply, but at this point, you cannot make them stop calling you.
However, once the original creditor charges off, places the debt for collection or even sells your debt to a debt purchaser, then you have the LEGAL RIGHT TO STOP THE CALLS!
When the debt is placed with a debt collector, of course, they want to get you to pay them money and don't really want to go the "legal" route unless all else fails!
Trying to explain your situation to the average debt collector is usually a waste of time. That's why I encourage all of our clients to NOT ANSWER the phone and if they do by mistake, JUST HANG UP!
But they are going to send you letters....lots of letters in hopes of getting you to pay or set up a repayment plan.
You might even get a letter offering to SETTLE for LESS THAN THE FULL BALANCE.
This may or may not be a good deal, but you should think about it.
When I work for my clients, I'm trying to negotiate a settlement of around 50% or less. In most cases we can. Here are some actual examples:
If you cannot come to an agreement with the debt collector over a reasonable amount of time (maybe 2-4 months), they may decide to:
File a CLAIM
You'd then get a SUMMONS
And that could lead to a JUDGMENT
Which could allow them to now...NOT BEFORE... get some of your money, etc.
ONE MORE TIME...
THE DEBT COLLECTOR CANNOT TOUGH ANY OF YOUR ASSETS WITHOUT A JUDGMENT!
Filing a CLAIM means that they hire an attorney to file the proper documents with the county court wherein you reside. They are "claiming" that you owe this debt.
Then, you'd be served a SUMMONS.
It basically states that the "plaintiff" (creditor or debt collector) claims you owe such-n-such a debt.
It also states that you have 20-30 days to "APPEAR" and give an "ANSWER".
That sounds like you have to go to court, but you don't!!!!
If you can prove (with clearly documented evidence) that you do not owe this debt, then you could file the legal document called an ANSWER.
But, in most cases, you owe the debt, so it is not necessary.
WHAT YOU CANNOT DO IS TO IGNORE THE SUMMONS!
In most cases, they (the debt collector or attorney for the plaintiff) may be willing to set up some reasonable repayment plan instead of going through all of the legal processes to get a judgment.
But, if you ignore the summons, they will then set a court date and be awarded a judgment by default (no one contested the CLAIM) so they win a DEFAULT JUDGMENT.
I hope you are starting to see that there is a long process before a creditor or debt collector can go after any of your assets.
So, let's say that a creditor or debt collector is awarded a JUDGMENT, NOW WHAT?
If you are employed, and receive a normal check (called a W-2), then they can now file a WRIT OF GARNISHMENT with your employer.
Your employer had no choice but to obey the "WRIT" and send the attorney for the plaintiff 25% of your net/take home check each week or by-week until the total debt you owe is paid back. And, they can charge interest as well (each state varies, but Oregon is 9%).
If you are unemployed or retired, unemployment income or retirement income from a retirement plan and especially from Social Security is 100% EXEMPT from garnishment.
But, BE AWARE!!!
If you "co-mingle" your retirement income (including Social Security) with other "earned income", then ALL OF THE FUNDS are now accessable at your bank!
That can happen if you transfer some of your retirement or Social Security income funds from checking to a separate savings account! Now they can go after the savings account.
So, if you have a judgment against you, make sure you get some sound advice on how to protect your assets!
Here is a link to a very good article about what I have been writing about. It's published by the Federal Trade Commission and very informative...
I hope this has helped you understand what a debt collector can and cannot do so that you won't be afraid!
If you could use some help, then let us know: