Info for Your Potential

Everyday, someone tells me their experience with a debt collector and it’s never good. The story always starts with, “They call me at least 8 times a day.”

I talked to a lady recently who told me about her experience with a debt collector. This collector, like most, was extremely determined. When she got home from vacation, she checked her Caller ID to find that this collector had called her 32 times in a 3 day period. Each message made it sound like it was a life or death matter that she contact them immediately, so she did. When she found out they were trying to collect on a debt that was $22.24 and over two years old, she laughed so hard, they hung up on her. They never contacted her again.

It would be wonderful if it was that easy to deal with debt collectors. If all you had to do was laugh and all your troubles would vanish, but debt collectors are not a laughing matter. As a matter of fact, debt collection has become so high profile that Attorneys are getting in on the game. It seems that getting an official looking letter from an Attorney makes debtors very eager to pay and pay quickly.

Fair Debt Collection Practices Act

Let’s look at some laws that protect you from debt collectors. Debt collectors:

• May call you between the hours of 8:00am and 9:00pm seven days a week. FDCPA Section 805(1).

• May not use obscene or profane language. FDCPA Section 806(2).

• Cannot call you repeatedly. It has become the practice of debt collectors to call more than 8 times a day if you do not pick up and answer your phone and leave a message each time they call. This is harassment. FDCPA Section 806(5).

• They cannot threaten to take your personal property (except in the event of foreclosure or repossession), damage your reputation or inflict bodily harm. FDCPA Section 806(1).

• They may call your home, cell, work, boss, friends and family. When they call your work, boss, family and friends, it is to gather contact information ONLY. They must state their name, and if asked, who they work for. They may not say that the call is in reference to a debt or debt collection. FDCPA Section 804.

• You may send the debt collector a letter telling them to cease and desist in calling you at your home, cell, work, boss, friends and family and they must stop all contact. If you have an attorney, put the attorney’s contact info on the letter and they must contact the attorney. Warning: I advise telling the debt collector that they may call you at home or by correspondence. If you attempt to stop all communication with the debt collector, they may file a lawsuit in retaliation. FDCPA Section 805(c).

Did you know:

• There is no law that says you have to answer calls from debt collectors.

• There is no law that says you have to return their calls. If you can’t pay the debt, then there is no need to contact the debt collector until you can pay.

• There is no law that says you cannot hang up on a debt collector. You should hang up the phone if the debt collector yells at you or will not let you explain why you cannot pay. This is abuse and it should not be tolerated. It’s common practice for debt collection agencies to train their debt collectors to rudely over-talk you when you try to explain why you can’t pay just to make you mad so you will agree to anything to get them off the phone. Personally, I don’t understand the mentality behind that, but hey, I’m not a debt collector. If you want to get a debt collector off the phone really fast, HANG UP THE PHONE! It works every time.

• There is no law that says you must agree to their terms especially when you know you cannot possibly pay the debt under their terms.

• You can record all conversation with your debt collectors. You must tell them that you are recording your conversation, if you intend to use the recording as evidence of abuse in court.

• If you cannot pay a debt, it is best to not open any First Class US Mail that you suspect has been sent to you by a collection agency.

• You should open and read any mail that has been sent to you by Certified Mail, Return Receipt Requested.

Statute of Limitations on Debt Collection

Did you know all debt, once it is considered delinquent, has a Statute of Limitations(SOL) pertaining to how long a creditor, debt collector or attorney can try to collect on delinquent debt? Well, it does and it is one of those laws that debt collectors hope you do not know. Once the SOL has expired, the debt collector cannot sue to force a debtor to pay a debt. You always owe a debt, but with an expired SOL, you cannot be forced to pay.

Each state’s SOL limitations are different. When dealing with debt collectors and before you pay a debt, it is wise to check and make sure the SOL for the debt in question has expired.

1. Get a recent copy of your credit report.

2. Look for the debt in question.

3. There will me a column or a field that says “Last Date Report” or something similar. Look for that date.

4. Compare the Last Date Reported with today’s date and if it is longer than the SOL for your state, then the SOL has expired.

Example: A debt collector is calling you trying to collect on a delinquent debt. According to your recent credit report, the Late Reported Date for the debt is 7/3/2001. You live in Texas and the SOL for all types of debt in Texas is four years. It’s 2007 and six years has passed. The SOL for this debt expired on 7/3/2005.

If it has expired, you MUST send a letter to the debt collector and tell them you are aware of the laws and know that the debt has an expired SOL. If you do not send a letter informing them that the SOL has expired, they have the right to sue and they will win a judgment against you.

You’ve got to be savvy when dealing with debt collectors. They truly hope you do not know the laws concerning your debt. Know the laws that protect you and know that you are doing the best you can. If you can pay the delinquent debt, by all means do so, but only if it benefits you. Watch out for debt collectors and attorneys who will try to get you to pay SOL expired (barred) debt. This is the latest in the game of debt collection.

Debt collectors and attorneys buy lists with SOL expired, also known as barred debt. They’re hoping you don’t know about the little known law of SOL for collecting on delinquent debt. If they can get you to pay, they get 100% profit!

Payment Arrangements, Agreements and Automatic Drafts

You can make payment arrangements or agree to pay over the phone 24 hours a day, seven days a week, 365 days a year, but BE SURE TO GET IT IN WRITING! If they say they can’t put it in writing, you say, “I won’t pay you until you do.” You’ll probably get an agreement in writing in the mail in a few days.

I can’t say this enough, do NOT make one payment to a debt collector until you get it in writing. Do NOT pay a debt collector by Automatic Draft, ACH, check by phone (there all the same) from your checking account. Debt collectors are notorious for drafting more than was agree, even if you have it in writing.

The biggest concern is the fact that if you send them a check from your checking account, they now have your account information. I can’t tell you how many collection agencies and creditors think this is an open invitation to help themselves to the money in your account at any time they deem it necessary. There is this false belief among collection agencies that a receiving a check from a customer gives them permission to take as much money as they want and at any time they want from your account. Of course, this is illegal and you as a consumer can sue, but many consumers do not and creditors know it.

Make all payments with a money order. Many collection agencies will insist that they can only take payments by draft. They’re not telling the truth. They can and will take a payment by mail. Let them know you know this. Once you get the address, send a money order.

Debt collectors are smart, but you can beat them at their game. Be smart about your debt. Know the laws, protect yourself and build your self-confidence when dealing with debt collectors.

How to Stop Creditor Harassment

If a collection agency, attorney or creditor (Hereafter, I will refer to all three as creditor) has broken the laws of the FDCPA, then you as a consumer have the right to file a complaint with the Federal Trade Commission and your state as well as the creditor’s states Attorney General’s office.

The number one complaint is harassment. No one should have to deal with any creditor who calls repeatedly. It is harassment. If you have talked to the creditor and they are still calling, I recommend doing all of the following.

1. Write a Cease and Desist Letter to the creditor telling them they may no longer call you at home due to the fact that their repeated calls are harassment. Send the letter to the creditor via Certified Mail, Return Receipt Requested and save the receipt the Post Office gives you and the Return Receipt that will come to you in the mail in a few days. They must abide by your request, because it is law (FDCPA Section 805(c)).

It is a very good idea to inform them that you will only accept communication from them in writing via correspondence. Make it very clear to them that since they call repeatedly, you consider it harassment under the FDCPA Section 806(5) and you will be filing a complaint with both the FTC and your and their state’s Attorney General’s office.

2. Make sure you keep a diary of all their calls and keep all phone records from your home or cell phone.

3. File complaints against the creditor with the FTC and your state and the creditor’s state Attorney General’s office.

4. There is no law that says you have to answer the calls of a creditor or return their calls. If you are being harassed, end the harassment by refusing to answer or return their calls. It’s that simple. It amazes me to this day to see how many people perpetuate the harassment by taking the call of a creditor. Today, many people have Caller ID on their home phones. Cell phones come with Caller ID. If you do not have Caller ID, it’s a good idea to buy a phone that has it. With Caller ID, you will know who is calling and will know which calls you should answer, such as those from family and friends.

5. If you have paid the debt or know that it is being paid on time, send a letter to the creditor with proof (canceled checks, statements, provide a Excel spreadsheet, etc.) that you have paid your debt or that it is being paid. Send it by Certified Mail, Return Receipt Requested. Staple all receipts to your copy of the letter and file it where you can find it.

Arbitration

From everything I have read and been told about arbitration, I would say that it is a useless means of legal recourse and I would never recommend it. Some, but not all, creditors require mandatory arbitration to settle disputes. Why? Well, it automatically puts the favor in their court. Awards are literally guaranteed to creditors. I have seen more people go into arbitration to prove they have paid a bill only to come out owing more or find that their efforts to prove the debt was or is being paid go unheeded.

By law, no one can deny you your right to legal counsel or legal recourse. If it comes down to needing legal counseling, I recommend seeking the advice of an attorney that specializes in debt dispute resolution. I know of one attorney who is an advocate for consumers who have problems with creditors and debt collectors. His name is Bud Hibbs. Visit his website, read and read some more. Then, if you feel you need help, you can contact him. His phone number is on his website.

Do not let creditors or debt collectors harass you. You have rights and laws to protect you. Use them to deal with debt collectors and keep your sanity. Deal with debt collectors and creditors with savvy. Use the law to beat them at their own game.