Article 107 Debt Collectors, What To Do When They Come Calling -Part 2
Debt collectors and how to deal with them? Here's what to do. Keep your cool and don't admit that you owe the money or make an excuse for non-payment. Write down the time and date and all the details of your talk. Find out the caller's name, his contact info, the name and address of the collection agency and the name of the original creditor.
Don't say anything about the debt or whether you can pay or not at this time. Neither should you mention your income and other finances, your place of employment or where you bank and other information, especially the ones dealing with the finances.
You should not tell the caller not to call you either. Nor should you send the company a letter telling the firm to cease and desist. These actions will make the company think they have no other way to contact you. In this case, a lawsuit may follow. Say you will call back within 30 days which is your right. Then just say goodbye.
You will have time to write them a letter to request for the verification of the debt. The law is clear the debt collectors are supposed to send you a letter within five days with all the details of the debt such as the name of the creditor and the amount owed. If they call again before you receive their reply, then say you can't answer until you receive their letter of verification.
You have thirty days after you receive their letter to dispute any debt that seems to be in error. The firm cannot contact you until they can send a written verification of the debt or the loan agreement you signed and a copy of the last bill you received. Receiving a copy with just your name and a list of alleged debtors along with the amount of debts is not enough as an evidence.
During this month of waiting, do a research of the debts you incurred, the amount and type of debt and the last date you made a payment so you can check if the statute of limitation has expired. If the debt has expired, the debt is not erased but it limits the ability of the collection firm to use the court.
The collection agency can still sue but you can tell the court that the debt has expired. In this case, either you can ignore the debt or negotiate with favor on your side without worries that they will take out the money from your salary or from your bank.
Remember though that student loans have no statute of limitation. Also never admit the debt is yours or the statute of limitation clock will start all over again. Consult with a lawyer if your debts are substantial so you can get legal protection from the creditors. Ask for free legal advice and tell him to charge the collection agency for fees. .
If you can pay and the debt has not expired, negotiate without admitting it is your debt. Just say you have only $200 on a $1200 debt, and some could accept that since often this debt has been sold to them for pennies on a dollar by the original creditor who has already taken a tax break for the loss.
Be careful what you say if the debt has expired because you don't want the statute of limitation clock to start all over again. You are in a better position to negotiate in this scenario. You can say for example that you want this collection account deleted from the files which could improve the credit history.
Before handing in the money, get a written copy of the agreement that says the amount to pay and that this is deemed to be payment in full. The agreement should also include the promises made by the debt collectors like not selling any part of the debt and that it is deleted from the credit report.
Hire a lawyer if the debt collectors are breaking the law. Be aware though that not all who call about the debt are debt collectors. They could be working directly for the creditor. Last but not least, know that there are consequences, tax-wise because the forgiven debt can be considered taxable.
The industry of debt collection should really be regulated. It is, to a certain extent, because the debt collectors are supposed to have passed an exam and registered. In order to track down complaints on this matter though, there should be some kind of a national registry for debt collectors.