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.
- 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?