Advice On Debt Collectors And Debt Collection Agencies

Credit card repair is the process of actively improving or rehabilitating one’s credit worthiness among creditors. There are many elements to credit card repair and it is imperative that individuals seek proper guidance based on their specific credit history and situation. In order to improve one’s credit rating, ultimately individuals must curtail and change their current credit habits for the positive. Unfortunately by the time an individual realizes that he/she is over his head (where credit damage is concerned); it is so late in the process that the credit damage may seem insurmountable. Eventually, the individual may receive repeated contact from creditor and/or debt collectors in regard to outstanding (or many times, incorrectly reported) debt. Debt collector’s calls can be overwhelming in some instances. Here are a few tips that we have found useful when dealing with debt collectors.

Remeber that kid in elementary school who was about 2 times bigger than every other 8 year old in the school? He is the one that put you in the trash can and took your lunch money in return for not giving you a black eye. Yeah…that guy! Well, “that guy” is now the debt collector in America, specifically, Buffalo, NY is America’s debt collection capital, and they are ruthless when it comes to calling debtors and making claims when trying to get payments. However collection companies from all over America are excessively growing. If you owe a debt, make sure you know what to say to these debt collectors when they call you and make outrageous claims. These collection companies are telling consumers that they are lawyers, they will foreclose the debtors’ homes, they will take away their children, and they will seize their bank accounts. Take away your kids??? REALLY?!? NO! Outrageous statements like this are causing an escalation in complaints annually.

So what do you do when these guys call you?

If these collection companies call you, do not settle with them. Never settle with any third party collector, but instead, if you want to settle your debt, settle it with the original account holder. Let’s say that you let a credit card with chase bank go to collections. Chase bank is going to sell that account to a collection agency, and the collection agency is going to call you (in some cases up to 15 times or more per day) and threaten you until you pay that debt to them. Don’t do it! If you decide you want to pay off that debt or settle it, contact chase bank and make the deal with them. So many things can go wrong with that unethical 3rd party collection company. You could make a payment to them, and they might end up never reporting it paid off, so you just lost a wad of cash because of unethical practices and no proof.

If these collection companies call you, tell them to put everything that they have to say to you in writing and mail it to you. This way, you will have documented proof of what they say and what you say. They might say “no”, and threaten you with ridiculous threats. If this happens, there is good news. You can send out a “cease and desist” letter, which will force them to stop calling you, put everything in writing, and mail it to them.

Does A Collection Aggency Have The Right To Sue For Debt – Advice on the Legal Powers of Debt Collection Agencies

If you owe money to a company and you are behind with your repayments, they may well use a debt collection agency to try to collect the money from you. A debt collection agencies have no rights to enter your home or take your possessions. All a debt collection agency can do is chase you by telephone, write to you and call at your home in an attempt to get payments from you.

Can A Collection Agency Sue For Debt – That Depends Whether They Own The Debt Or Not

If you genuinely owe money, then the person or organization you owe money to has the right to sue you by taking legal action against you through the Courts. Typically a company will try a debt collection agency first, and then consider legal action if that does not work. Any subsequent legal action will be on the part of the original creditor, but they may still use the collection agency to progress the matter on their behalf.

A debt collection agency can only sue you if your debt is with them, not a third party creditor. Some debt collection companies buy bad debts for a fraction of their value and make their money by trying to recover the full amount of the debt. If the company you originally owed money to sold the debt to such a collection agency, then that agency could indeed sue you to recover that debt, because the debt now legally belongs to them.

Can A Collection Agency Sue For Debt – Just Because They Can, Does Not Mean They Will

Even if you are chased by a debt collection agency and are threatened with legal action by the agency or the original creditor, it is by no means certain that they will go ahead and sue you. Whether they take legal action will depend on many things, the overall governing factor being whether they think they are going to end up better off by suing you or not.

There are costs involved in legal action and the process can be slow, so if the debt is relatively small, or if they think you really haven’t got the money to pay, they may decide to cut their losses. Bear in mind that only a small proportion of debts end up being settled through the court, and that even if the court finds in their favour, there is still no guarantee they will get the money.

Can A Collection Agency Sue For Debt – The Legal Process of Being Sued

The exact process of going to court will vary depending which country or state you live in, but essentially you will be required to appear in either a small claims or higher court (US) or a County Court (UK). The first thing you should always do if you are being sued is to take legal advice. The principles in the US and UK are very similar, but I will outline them separately in the interests of clarity.

Being Sued For Debt In The US

You will receive a court Summons and a Complaint (stating how much they say you owe). It is important that you take notice of these and that you attend court on the specified day. Failure to do so will result in the court judging in favor of the company suing you. Prior to this you are free to contact the company you owe money to and see whether a settlement can be agreed.

If you can’t reach a settlement, then you will need to attend court. If you do not agree with the amount being claimed (or that you owe the money at all), you must attend court to fight your case. When you inform the judge that you are contesting the case there will need to be a ‘trial’ which may well be on another date.

You should also consider whether you wish to enter any defences or counterclaims. A defence should be based on legal reasons why the claimant is not entitled to any or part of the money claimed. Counterclaims might be for something like a violation of consumer protection laws by the creditor. The lodging of a valid defence or counterclaim can increase the likelihood of the claimant dropping or settling the claim if they think the case is going to be lengthy and costly to fight.

Can A Collection Agency Sue For Debt – Conclusions

Anyone who you owe money to can sue you to recover it. This will only be a collection agency if they have bought the debt from the original company that you owed it to. It is obviously preferable to avoid letting things get this far in the first place. No debt is impossible to deal with. It may take time and be painful for a while but you can deal with any debt crisis yourself if you take the proper step by step approach.

In the US the Fair Debt Collection Practices Act regulates how debt collection agencies can operate. Many states also have their own laws relating to debt collection, and in general if the state law is considered to be more restrictive than the FDCPA regulations, then the state law is what counts.  These set out guidelines on how they should operate, and list examples of unfair practices, such as harassment or pretending they have more powers and rights than they do.

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