Debt Collector Harassment
Collections strategies come in two different forms. Those are debt collection agencies and debt collection attorneys. Of the two, debt collection attorneys are the more dangerous, which is why debt collection agencies sometimes have attorneys on-hand who can file lawsuits. Most of them, however, don’t. They are left with only two tricks up their sleeves. The first is to write you collections letters that demand repayment or make harassing phone calls, the second is to place the account on your credit report.
But there is widespread confusion over what debt collectors can and cannot do. In this article, we’ll discuss the collections process, debt collections agencies, and debt collections attorneys.
Any creditor has six years to recover the debt by legal means from the last date of activity. Once the debt has gone beyond that six-year period, it is no longer recoverable. Collections agencies can try to recover the debt, but they won’t be able to file lawsuits, garnish wages, or even place the debt on your credit report. They’re left with only one tactic: Harassment.
Why is this financially worthwhile? Essentially, these collections agencies purchase expired debt wholesale for pennies on the dollar. This gives them a right to attempt to collect the debt and gain access to your personal information. If you make even one small payment of $1, the debt is rehabilitated and the six-year clock begins ticking down once again. In other words, the company can file a lawsuit against you if you make any payment toward the debt. They can then garnish your wages, levy your bank account, or place a lien on your property.
How to Deal with Zombie Debt
Zombie debt collectors can safely be ignored whereas other debt collectors cannot be. You have a right to know what specifically they are requesting payment for. If they don’t tell you what debt you owe on, you can hang up the phone. If you look into the debt and realize that it is more than six years old, then you have the right to do the following:
● Ask for the debt collection company’s address
● Send them a cease and desist letter via certified mail
● If the harassment continues, contact a debt harassment attorney
There is no scenario in which making a payment on expired debt is in your best interests
What are Debt Collectors Prohibited from Doing?
The Fair Debt Collections Practices Act prohibits debt collectors from using unreasonable
means or harassment to collect a debt. Below is a shortlist of prohibited debt collection tactics
Debt Collectors Can’t Show Up at Your Job
Debt collectors are prohibited from showing up at your place of work. They can, however, call your place of work so long as they don’t tell anyone they are debt collectors. You have the right to request that collections agency cease contacting you at your job. They must oblige this request.
Debt Collectors Can’t Harass You
Debt collectors are prohibited from certain types of harassment. Calling you every day, however,
does not count. What does count is:
● Calling you repeatedly for the sole purpose of annoying or harassing you
● Threatening violence against you
● Publishing information about you
● Using abusive/obscene language
● Calling you before 8 am or after 9 pm
Debt Collectors Cannot Lie or Deceive You
Debt collectors are prohibited from making false threats against you. They cannot even say they are going to sue you if they don’t have the means or the power. They can’t threaten you with any legal action, say that your kids will be taken away from you, or otherwise use baseless threats to facilitate the collection of the debt.
What Can Debt Collectors Do?
Debt collectors, provided that they have lawyers on hand to file a lawsuit, can threaten to file a lawsuit against you. They can then actually file the lawsuit. If you don’t show up at the hearing, then a default judgment will be entered against you. So you shouldn’t ignore the debt collector, but you do want to see proof of the debt and ensure it is within the six-year statutory limit. Once the court has ruled in favor of your creditor, the creditor can then begin taking more aggressive collection actions. This includes garnishing your wages, levying your bank account, and placing liens on your real estate.
What Happens When I File for Bankruptcy?
If you are facing lawsuits that you know you’re going to lose, you have a couple of options at your disposal, one of which is bankruptcy. As soon as you file for any form of bankruptcy, all creditor actions against you must immediately stop until your bankruptcy case has been heard. That means lawsuits will be dismissed before there is any judgment against you. That is one of the reasons why it’s best to file for bankruptcy prior to a lawsuit. While you can sometimes recover garnished wages or levies, a bankruptcy cannot remove a judgment lien from your property.
How To Deal With a Debt in Collections
For the most part, debts that are in collections were purchased by a collections agency for a small fraction of the original amount owed. Alternatively, the debt collection company may take a cut of the amount paid, somewhere between 25-45%. You may be able to settle the debt for less than you owe, but first, you need to be sure that it isn’t “zombie” or expired debt. Otherwise, you’ve just rehabilitated a dead debt and then they can file a lawsuit against you.
That’s why when debt collectors call, they often offer to allow you to pay a small amount toward the debt, say ten or twenty dollars. The debt is now considered current (rehabilitated) and they can proceed with a lawsuit if they want to.
Is Bankruptcy the Right Choice?
If you’re receiving harassing phone calls, collections letters, or a debt collector is threatening a lawsuit against you, it may be the time to consider all of your options, bankruptcy being among them. Talk to Tom today at Butcher Law Office, LLC for more information on taking control of your finances.