Harassment Debt Collection
Regrettably debt collectors are often less than ethical. This has caused the government to pass legislation to protect you from unethical debt collection tactics.
If the debt they are contacting you about is legit then you should ask for validation of the debt. This must be done in writing.
Failure to do this and if you ask for validation over the phone, 99% of the time it will be completely ignored. Additionally send your letter certified mail so you have proof that they received it.
If your debt is validated by the creditor and is within the statute of limitations of your state, then you should negotiate payments. Statute of limitations are commonly seven years from the first date of delinquency.
When negotiating a settlement payment you should never pay the full amount. This is because your account has been bought from the original creditor for just pennies on the dollar. We suggest you start your settlement offer at 50% of the balance.
Collection agencies will accept a negotiated payment. This is because the collectors only way to recoup the money they spent on your debt is; by accepting a negotiated payment or selling the debt to another collector for a fraction of what they paid.
When you agree on a settlement payment you should get in writing from them that in exchange for your payment they will not report any derogatory information to the bureaus. If you do not do this you will stop the phone calls, but you will have a whole new set of problems because of a poor credit score.
Also if you just pay the debt it will be reported as a paid collection. This is still a very bad mark on your credit report and will not improve your score.
Again, you must get in writing that negative information is not going to be posted to your report regarding the debt. Occasionally that negative information has already been reported you must get them to agree to remove it from your report.
If you do not do this there is no benefit to paying the collection. Additionally always pay with a paper check and no other form of payment. Just so you know you can actually use the memo line to repeat the agreed upon contract regarding the bureaus reporting, and once the check is cashed you will have a binding contract.
If you are being harassed by an agency you are not alone. Also they only can legally take so many steps to collect.. The Fair Debt Collections Practices Act says that a debt collector can not;
- Threaten legal action (arrest, jail)
- Harass you with calls
- Call your employment (once asked not to)
- Claim to be anyone they are not
- Threaten a lawsuit (unless they are taking legal action)
- Threaten to garnish wages or seize property (each state is specific about what is legal, often a court order is needed)
- Call your family members or neighbors and speak with them about your debt
- Only call between 8am and 9 pm
- Call you if you have notified them that you will not accept calls regarding this debt.
Often these regulations are ignored. If you have been a victim you should report the agency to the FTC and the Attorney General. A majority of collection agencies have been fined because of violation of the FDCPA.
Also you can file a lawsuit against the collection agency and be awarded monetary damages. Make sure to keep all communications in writing in order to prove they are in violation.
If the debt they are contacting you about is legit then you should ask for validation of the debt. This must be done in writing.
Failure to do this and if you ask for validation over the phone, 99% of the time it will be completely ignored. Additionally send your letter certified mail so you have proof that they received it.
If your debt is validated by the creditor and is within the statute of limitations of your state, then you should negotiate payments. Statute of limitations are commonly seven years from the first date of delinquency.
When negotiating a settlement payment you should never pay the full amount. This is because your account has been bought from the original creditor for just pennies on the dollar. We suggest you start your settlement offer at 50% of the balance.
Collection agencies will accept a negotiated payment. This is because the collectors only way to recoup the money they spent on your debt is; by accepting a negotiated payment or selling the debt to another collector for a fraction of what they paid.
When you agree on a settlement payment you should get in writing from them that in exchange for your payment they will not report any derogatory information to the bureaus. If you do not do this you will stop the phone calls, but you will have a whole new set of problems because of a poor credit score.
Also if you just pay the debt it will be reported as a paid collection. This is still a very bad mark on your credit report and will not improve your score.
Again, you must get in writing that negative information is not going to be posted to your report regarding the debt. Occasionally that negative information has already been reported you must get them to agree to remove it from your report.
If you do not do this there is no benefit to paying the collection. Additionally always pay with a paper check and no other form of payment. Just so you know you can actually use the memo line to repeat the agreed upon contract regarding the bureaus reporting, and once the check is cashed you will have a binding contract.
If you are being harassed by an agency you are not alone. Also they only can legally take so many steps to collect.. The Fair Debt Collections Practices Act says that a debt collector can not;
- Threaten legal action (arrest, jail)
- Harass you with calls
- Call your employment (once asked not to)
- Claim to be anyone they are not
- Threaten a lawsuit (unless they are taking legal action)
- Threaten to garnish wages or seize property (each state is specific about what is legal, often a court order is needed)
- Call your family members or neighbors and speak with them about your debt
- Only call between 8am and 9 pm
- Call you if you have notified them that you will not accept calls regarding this debt.
Often these regulations are ignored. If you have been a victim you should report the agency to the FTC and the Attorney General. A majority of collection agencies have been fined because of violation of the FDCPA.
Also you can file a lawsuit against the collection agency and be awarded monetary damages. Make sure to keep all communications in writing in order to prove they are in violation.
About the Author:
For a free credit consultation call 1-866-246-7311. If you want information on how to deal with Midland Credit Management or Palisades Collection two common debt collectors visit us.
posted by Credit Counseling at
8:35 AM
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