5 Tactics to Use when Dealing with Debt Collectors

Debt collection is profitable for debt collectors! There are about 4,100 debt collection agencies in the United States, “employing nearly 450,000 people, and the industry expects to grow by 23 percent over the next three years,” notes Peter Van Buren, in a Huffington Post Blog entitled “Poverty is Profitable: 1 out of 3 US Consumers in Debt Collection”. He explains that in 2010, Debt Collection Agencies collected about $40 billion dollars from consumers. In another area of debt, Van Buren states, American banks are collecting approximately $30 billion dollars a year in overdraft fees, instead of bouncing checks when customers write a check that exceeds the amount in their account! How does this impact consumers? Van Buren quotes a report by the Urban Institute and Encore Capital Group’s Consumer Credit Research Institute that says that 77 million Americans have a debt in collection. If you are one of the over 77 million Americans with a debt in collection, the following tips are for you.

Know your rights under the Fair Debt Collection Practices Act. As a consumer, you generally have the right to have the debt validated and verified, the right to be protected from harassment and abuse in the collection of a debt, and the right to sue debt collectors for violation of the law.

Make sure the debt is not “old” and past the time that it can be collected via the filing of a lawsuit. If the statute of limitations has passed, the collection agency does not have the right to pursue the collection of the debt in court. If you are coerced into making a payment on an old debt however, you may lose the protections of the statute of limitations and the collection agency may get additional time in which to sue you, extending the time period allowed by the statute of limitations.

Verify the debt. Scrutinize any information that is provided to you as verification of the debt. Did you live at the address in question? Is the name listed correctly? Did you ever have a debt with the original creditor? Have you already paid the debt? These are the questions you should be asking before making payment arrangements.

Don’t ignore collection attempts. If you ignore the attempts, the debt collector may file suit against you. If that happens you will be in danger of being subject to a default judgment if you do not respond to the court proceedings. Its best to try to work out a payment arrangement or settle the debt for a lesser amount.

Get any settlement agreements or payment arrangements in writing. The written agreement and your payment receipts will be proof of payment if the debt is sold to another collector who begins collection efforts against you.

In conclusion, these five (5) tactics should help you to deal with a debt collector should you be contacted in the collection of a debt. If the debt collector refuses to comply with the law, abuses or harasses you in the collection of a debt, or fails to stop collection actions when you have shown that the debt has been paid or the debt is not yours, you may wish to consult with an attorney. The Royal Legal Group, LLC, is here to help.