When times are hard, it is reasonable to expect that people will have trouble keeping up with paying their debts. Despite a person, really really really really wanting to stay current, sometimes life happens and you get behind.
Unfortunately, financial institutions are in the business of making money and like a loan shark, will not honor a promise to pay, and they will stop at nothing when it comes to getting you to pay up. Sometimes, they even cross the line when it comes to collecting funds (like a bookie). If this is happening to you, it is important for you to know your rights when it comes to your debt.
Even though you owe money, you still have rights!
The Debt Collector
Statistically, most debt is the result of expenses charged to credit cards or medical bills. As a result, borrowers end up with accrued interest on top of their principal debt amounts. If you are unable to pay your debt on time, and after several attempts to collect, the lender will forward the debt onto a registered collection agency with which they have partnered with or sell the debt to a debt purchasing company at a reduced cost.
This is where it can get ugly!
Even though you have never dealt with that company, you could get threatening phone calls and harassed!
Thankfully, you have rights that cover you in such scenarios.
What to Do When Debt Collectors Come Calling
The moment these collections agencies start sending letters, making calls and even coming to your house, the first thing you need to do is to write a letter to the company. By law, you have a right to make a request from the agency to show proof of its legitimacy (debt validation). If the company is unable to provide such proof, you can refuse to pay the debt.
Are You Paying the Right Amount?
Because of additional interest and other charges, it can be difficult to identify the exact amount you need to pay. This is were the debt validation letter comes into play. This is why you need to be in full control of the money you owe. It is your job to find out how much your exact debt is.
Your Options
- Obtain Your Credit Report – Get a copy of your credit report. This should highlight the outstanding debt. But, beware sometimes the collection agency will update the amount you owe on your credit report with additional fees.
- Know your debt statute of limitations – All debt has an expiration date (except student loans). Know it and use it wisely in your arsenal against debt collectors!
- Use the Fair Debt Collection Practices Act (FDCPA) – It exists to regulate how collection agencies behave, and it serves as your assistance in getting valid information regarding your debt. By getting the help of the FDCPA, you can insist on receiving updated information on your loaned amount. At the same time, you can dispute debts that you have already paid off or that have had excessive amounts of interest added. This is the best way to eradicate unwanted debt from your account.
Nobody likes being harassed or threatened. This is why it is important for you to know your rights. Even if you owe money to the bank, there is no reason for you to get harassed into paying it. After all, you are still a human being protected by your rights.
By knowing how the FDCPA protects you, you can protect yourself from collection agency threats.
Have you had a bad experience with a debt collection agency? What did you do?
{ 8 comments… read them below or add one }
I am one such lucky person for not having to go through many debts. I’m 33 and the only debt I got in was a Housing Loan which after two successive years of paying and without delay, was already satisfied.
Ironically, I am into personal lending. I lend money to my office mates with a corresponding interest.
Too bad, I have so many bad experiences when it comes to collecting off their debts, which makes me think of not pursuing this lending anymore.
I had a Sprint bill that got ugly back during my year without money. Those people were horrible…I thought they were going to send a hit man after me.
Shockingly, after we paid the bill, another collection agency told me we hadn’t paid and I owed them the money! They were nasty until I produced proof. Then they went away. Six months later a THIRD collection company came calling for the money! It’s been 15 years since I’ve been called, but I’m still hanging on to that verification that the debt is paid.
Most people who are dealing with debt collectors do not realize that they have rights. Debt collectors tend to be abusive and intrusive. Education and awareness is a must.
Recent piece in “AARP Bulletin” May 2012, discusses on lawsuit with a purposed settlement that some members of the “class” did feel asdequate. AARP missed a good chance to enlightened members sbout the many aspects of some “dos and dont’ ” that are important for consumers to know. There are too many to set them out here, but consumers need to know of collection acts and action that are are prohibited.
@Kevin, you’re playing with fire by lending to friends and coworkers. I had a bad experience and will never lend money to friends/family again unless I don’t need it
@JOe, that’s called zombie debt, the collection agency buys it for pennies in hopes that you don’t know the rules. So, they can get you to pay up.
@Aloysa, you’re 100% correct. Most people have no clue about their rights.
@Claude, the problem is people don’t want to know about their rights. Many laws exists, most people don’t care until it’s too late.
I rented a bedroom suit a rental place I pay each month I got behind in may I caught my payments up,I am a single parent. I paid a partical payment in july and told them I will catch it up on the 3rd. Since then I have received numerous of phone calls they have came to my house everyday. I was not there my neighbor said they knocked so hard on my door she thought they were going to tear it down. She said they even walked around my house knocking on my windows and my back door.My neighbor said they left and turn around and came back. I was not at home.
Help!!! Please
I was recently fine by court £300, while I was making effort to make payment and arrangement with court. It was very difficult to get across to someone. However, I made a token payment of £20 to show my intension. Thereafter, I paid another £100. Then not too long I received a letter from debt collectors. I called them immediately but this guy will not give me any opportunity to speak but rather just want to collect money.
I therefore wrote via email on 10th June 2012 to the court to explain what was going on and so far how much I have paid and explained that I will make a final payment by the end of June, and to confirm if the debt collector was send by them. I received a letter from court dated 14th June 2010. The confirmation Letter got to me on the 19th of June and I therefore pay off the money on the 20th of June 2012. Debts collect sent bailiffs to my house on the 25th of June 2012. Despite that they confirm receiving the money on the 21st of June they were still chasing me to pay for their attendance fee and the first £20 paid to the court was not counted.
I contacted the court on phone and I was told that as far as they are concern the account is zero and they don’t know why they are still chasing me. I asked the lady to put in the post account records of my payment which I haven’t received yet.
First letter received from debt collect stated £365
Bailiff’s letter stated £345 with wrong spelling of my name.
Please see how payment has been made
9th May 2012 £20
7th May 2012 £100 as I was waiting confirmation from court to make payment to you.
20th June 2012 £245 as the final payment
As it stands now they were asking me another £235
I have received threat letter to take my properties.
The pressure is too much and I can’t work it out.
I’ve been on both sides of the phone call. On the collection side, commercial, for a bank – and although the debtors did owe us money, the bank screwed up the interest and other details all the time. We also screwed up taking the money directly from the borrower’s checking account. On the debtor side, I’ve authorized payments directly from my account, the creditor screwed it up, and then called back angrily a few days later, blaming me! Also over the years I’ve received letters about accounts that I never had or that were paid 6-7 years earlier with no problems (lived in the same place for 4 more years after paying in full and closing the account, and the original creditor never contacted me – why would a collector call me 2 years after moving?), as well as letters and phone calls for a guy with a similar last name (sounds the same but spelled differently) – with different past address, etc… (definitely not looking for me but screwing up the spelling – looking for a completely different person but whoever did the skiptrace got the wrong guy), and having to deal with people who either weren’t convinced (really not sure why, as none of their info matched me) or honestly didn’t care who paid as long as they got money, and tried to get me to pay someone else’s debt. I’ve received calls that were obviously total spam (Indian voice telling me she was calling from “Windows Corp” to help fix my computer), and lots of telemarketers’ calls. And we’re on the do not call list!!! Do these idiots ever collect a dime from anyone? Are there people out there who pay them just to get them to stop calling – even if they don’t recognize the debt? What is the deal with this industry???