Legal And Illegal Tactics A Debt Collector Will Use To Collect: Debt Collection Basics Part Three
In the first two articles I defined what a delinquent account that had been sent to collection was, how sending late accounts out to an debt collection company benefits a creditor, and the practice of selling an old debt to a third party collection agency.
I described what sort of data a collection company will collect and use in their efforts, and also that third party collection agencies are governed by federal and state laws and are overseen by the FTC.
Some collection agencies will use illegal, deceptive and strong arm tactics to confuse and scare debtors that include pretending that they are one of their creditors and asking them to verify information, pretending to be an old friend or neighbor to catch a debtor off guard, repetitively calling or mailing a debtor to the point where it gets to be a nuisance, or sending threatening letters or leaving threatening voicemail messages.
Legal but manipulative practices include pressing the debtor, preying on their emotions, and using vague threats like “respond within ten days or further collections attempts will follow.” Other illegal practices include making an idle threat of litigation or pursuing litigation when the debt collector has no intention to, threatening to throw a debtor in jail, threatening to garnish wages or seize bank accounts when they have no authority to, lying about the amount that is owed, or asking for more than what is owed are used as well.
For the debt collection industry, time is the enemy and a good debt collector is fully aware of this. Their goal is specifically to obtain money as soon as possible.If you are talking to a debt collector, keep in mind that at any time you have the legal right to tell them you are busy and will call them back if you are flustered, hang up, cool off, develop a game plan, and contact them later. An aggressive debt collector will ask you why you can’t make payment arrangements today.
Rapid Recovery Solution is a commercial collection agency that writes articles on medical collection agencies. Also published at Legal And Illegal Tactics A Debt Collector Will Use To Collect: Debt Collection Basics Part Three.
How Will A Collection Agency Try To Collect My Debt?
Collection agencies primarily use letters and phone calls to achieve collection. Collection letters are typically computer generated, and differ in severity. The first letter usually starts with a simple “reminder” tone and as the letters progress they may build up to a final demand.
The first demand letter legally must inform the debtor that they have the capability of disputing the validity of the debt, or if they choose to, request written verification of the debt. If they would like to receive written verification, the agency by law must send some sort of confirmation after verifying it with the original creditor. Demand letters will also confirm that they come from a debt collector, and that any information obtained will be utilized in the attempt to collect debt.
The envelopes of collection correspondence cannot reveal anything that might suggest that it is a collections letter. Therefore, any type of mail that might be embarrassing or public, such as a post card, would be strictly prohibited. The return address should also be discrete; as a result many collection companies will just use their company’s initials, or some other type of vague name.
The nature of the additional notices will depend on the debtor’s reaction. If a debtor agrees to pay off the debt this will most likely result in letters written with a gentler tone. Belligerent reactions, or even a lack of reaction from the debtor might result in a more threatening tone to the letter.
The idea of debt collection is to try to achieve a sense of urgency. Most debt collectors are aware that many debtors owe many types of debt and seek to instigate the debtor to prioritize their particular account. Deadlines may be set, with vague threatening tones, but failure to respond usually results in only more correspondence. Collection letters will always try to convince the debtor to call the collection agency on the telephone directly. If the debtor does not within thirty days, then the collector will often initiate phone calls.
Mallory Megan works for Rapid Recovery Solution and writes articles on commercial collection agencies Check here for free reprint licence: How Will A Collection Agency Try To Collect My Debt?.
Student Loan Consolidation Might Be Your Best Bet For Debt
Income is limited these days for everyone, who struggles to maintain the standard of living. In the past, loans carried you through college, but now that you\’re out these debts have come out to haunt you. You may be contacted by various debt collectors and left a frantic mess seeking someone who can help you with a school loan consolidation.
The majority of students that have just finished their education and are currently looking for jobs try for federal school loan consolidation first. This loan is beneficial in a number of ways. First, the government is the source of this loan but it is issued by private lenders. That means that the time you have to repay the loan can be extended for a long duration.
Maybe the most tempting aspect of school loan consolidation is that the multiple student loans are substituted with just one loan. The overall sum of the debt is reduced; at times this reduction can even go up to 60%. This, of course leads to reduction in your monthly payment.
Even better, the new rate of interest is founded on the weighted average of the rates that are applicable on your present loans. You\’ll also get rid of the mental stress associated with remembering the details about multiple loans. Consolidation does not require a cosigner or any checking of the credit score, and you can utilize this opportunity to improve the credit score or rating.
The only drawback is it is extremely hard to prove yourself eligible for the federal school loan consolidation. Typically, you will need the assistance of a good debt consolidation expert to prove that you are eligible for this kind of consolidation. The standards to be qualified for this loan are very rigid, leaving many ineligible for the loan. Nevertheless, it is worthwhile to check to see if you qualify. It could be a good resource for protecting your finances in the future.
Mallory McGuinnessworks for a debt collection agency. She also writes articles on the credit industry, business and finance, and debt collection. Visit the Uber Article Directory to get a totally unique version of this article for reprint.
Bankruptcy Filings Blow Up As Economy Suffers
Layoffs and pay cuts pushed more people into bankruptcy last year, and analysts say that the situation will most likely not improve until the unemployment issue improves. In Wisconsin, bankruptcy filings raised to 30 percent in 2009. This came on top of a 35 percent increase in the preceding year.
According to bankruptcy lawyers, it is not just firings and layoffs that are motivation to file. It\’s the losses of once-regular over time pay and full time status that have left consumers from keeping up with monthly payments that in the past were not an issue to pay.
U.S. Bankruptcy Court information shows that there were 27,413 bankruptcy petitions filed in Wisconsin last year. More than 80% were Chapter 7 cases. Chapter 7 cases annihilate medical bills, credit card balances, and other types of debt. Recent Research by The Associated Press illustrated that more than 1.4 million bankruptcies were filed in 2009, an increase of about 32% from 2008.
And despite the fact that bankruptcy takes away the looming debt and offers consumers a fresh financial start, debtors often remain unemployed and are unable to find employment to get a suitableincome again.
Worse still, unless the economy improves enough for companies to start hiring, there is little reason to think that bankruptcies will go down in 2010. Experts have noted that home foreclosures will continue to pile up in 2010 because people who previously had adequate credit have lost employment and cannot keep up with payments.
Bankruptcy might seem like an acceptable option to get a fresh start, but it affects your credit report negatively for ten years, rendering you not able to get a car, place of residence, or employment. Before declaring bankruptcy, it is a wise decision to speak with your creditors and see if some sort of repayment plan can be worked out.
Mallory McGuinness-Hickey is employed by a debt collection agency. Also, she composesarticles on consumer spending, business, finance, and debt collection. Click here to get your own unique version of this article with free reprint rights.