Not What's in Your Wallet, Who's in Your Wallet?
8 Things Debt Collectors Won't Tell You
1. Some of their threats have no teeth.
When a collector says, "We are going to inform your creditor that you are refusing to pay this bill!" they are just using reverse psychology. Your creditor has already figured out that you aren't paying the bill, or they would not have sent your account to a collection agency in the first place!
2. They have to stop bugging you at work if you tell them to.
The Fair Debt Collection Practices Act is very clear on this point. Once you tell a debt collector your employer doesn't allow you to talk with her while you are at work, they must stop calling you there.
3. They can't blab about your debts to others.
Debt collectors are generally only allowed to discuss your debt with you, a cosigner, your spouse, or your attorney. They cannot discuss your debt with neighbors, relatives who aren't obligated to pay the debt, or coworkers. In fact, under the FDCPA, they are generally only allowed to contact third parties to locate you, and once they have found you, contact with third parties must stop.
We call these 'third party disclosures,' a violation of Section 1692c (b) of the Fair Debt Collection Practices Act, and they are exceptionally common, particularly when the debt collector leaves a message on a public answering machine. These public answering machine violations are called "Foti" violations after the landmark case Foti v. NCO Financial Systems, 2005.
4. Your debt may be too old for me to do anything about it.
"Stale debt is not collectible," advises Atlanta bankruptcy attorney Jonathan Ginsburg. "Every state has statutes of limitations that make debt of a certain age not collectible. Debt collectors are not currently obligated to advise you that they cannot sue you or legally ding your credit report if you refuse to pay stale debt."
In most states, the statute of limitations runs four to six years from the date you last made a payment. And that's the catch. "In some states, a voluntary payment on a stale debt can revive the debt and make it legally collectible," But don't be surprised if you hear about a very old debt. "Stale (or zombie) debt is big business.
"Never admit to any debt without first getting more details,” At a minimum, you want to establish that the debt is legitimate, you owe it, the collector on the other end of the phone isn't a scammer, and whether the statute of limitations has expired.
5. Debt collectors are under pressure to collect, just like you are to pay.
Collectors "work on sliding scale commissions and the quicker they get someone's money, the higher the commission," If they don't get your money within a fixed period of time, your account will be sent back to the creditor" or sold to another debt collection agency.
So while collectors may pressure you to pay right away, staving them off a bit might work in your favor if you can't afford to pay the full amount you allegedly owe.
6. If they really want to play hardball, they will have to sue you.
If you owe unsecured debt such as credit card debt, collectors must typically sue you before they can go after your property, including money in your bank accounts, or try to garnish your wages. But threatening to take such actions before they have sued you and won a judgment may be illegal. Even threatening to sue you to collect a debt may be illegal if the collector has no intention of doing so.
"Debt collectors use applied psychology to persuade and threaten consumers to pay debt." "Often this psychology involves veiled threats of criminal action or litigation when these options are not available."
7. Paying off this debt won't help your credit ratings.
Under the Fair Credit Reporting Act, a collection account may remain on your credit reports for seven years and six months from the date you fell behind with the original creditor. Collectors may make it sound like paying off collections account will improve your credit, by telling you that they will update your credit report to "paid in full" status. But this probably won't help your credit scores. Collection accounts are negative, regardless of whether they are paid or not.
If an account cannot be validated, it should be on your account in the first place. All information provided to the three major credit reporting companies is given voluntarily and the companies reporting are paying a fee to do so.
8. You probably don't have to pay your deceased relative's debt.
"Collecting debts of the deceased is a growing and lucrative business. Creepy, huh?" You aren't responsible for the debts of relatives, who died unless you were a cosigner, or the debt belonged to your spouse who died and you live in a community property state. Creditors or collectors may try to collect from the estate, if there is one. If the person left nothing, then there is nothing to collect. Though they are supposed to tell you that you don't have to pay the debt, they may conveniently leave that out or gloss over it.
Education, education, education!
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