Millions of people around the country are in debt up to their eyeballs. We’re not here to sit in judgment of anyone, by any means, but instead to point out that, if that includes you, the debt collector hounding you about paying back your debt will sometimes take either unfair and even illegal advantage of you because you don’t fully know your rights.
While we won’t sit here and try to debate whether or not you should pay back any debts that you owe, we will admit that we don’t like unscrupulous debt collectors and want to help you avoid falling for their tricks and traps. The fact is, the FTC, and the Fair Debt Collection Practices Act that they put into law, were created to protect you from debt collectors that step over the line. Below are some facts about your rights that you definitely should know in order to protect yourself. Enjoy.
Fact 1: There is no law that says that you must communicate with debt collection agencies. If you’re being hounded by a debt collection agency, and they’re tirelessly calling you, sending them a “cease and desist” letter is the best way to get them to stop. Of course you have to realize that they can and might pursue legal action if you do this, and will send you a notification of their intent via snail mail. But it will stop those harassing phone calls.
Fact 2: Just because you paid an account in full doesn’t mean it will be erased from your credit report. Even if you pay off a debt in full it can still remain on your credit report for up to 7 years. If you wish to avoid this however, you can sometimes negotiate with the collection agency to have them remove the debt from your credit report once it’s paid. If they agree to this, you have to get it in writing to make sure it happens before you pay them a single penny. If you pay and don’t have it in writing you won’t have a leg to stand on.
Fact 3: Disclosing Personal Information is not legally necessary. Many debt collectors will insist that you give them vital information like your Social Security number and your date of birth, but the fact is that there is absolutely no law that says you have to do so.
Fact 4: Until an actual judgment is made by a court of law, none of your assets can be touched and your wages cannot be garnished. There are a few instances where this doesn’t apply however. For example, if you have federal student loan debts, the federal government can garnish your wages with or without a court order. Also, if you fall behind on your mortgage the bank can foreclose on your house without a court order. The same thing goes for a car loan.
Fact 5: Although the debt collector wants to get the largest amount of money from you as possible in your initial payment, there is no law saying that you have to pay out a huge chunk of cash up front. In many cases a payment plan can be set up in order to help you pay your debt over a longer period of time with more palatable monthly payments.
Fact 6: The best time to negotiate a deal to pay off your debt is usually at the end of any month. The reason for this is that debt collectors, who work on commission and bonuses, will be more inclined to help you reach a settlement on your debt when the end of the month is near so that they can make their bonuses and get their commissions.
Fact 7: It’s not necessary to always work with the debt collector. In many cases you can work with the original creditor who might be able to give you better repayment options. On the other hand, if that creditor has already sold your account to a third-party debt collector you don’t really have any other option but to work with them.
Fact 8: Once the statute of limitations on your debt has lapsed, you don’t have to pay that debt. It doesn’t mean that debt collectors will stop trying to collect their money but, luckily for you, they can’t do anything legally in order to force you to pay.
Hopefully these 8 Facts have opened your eyes to some of the legal options that you have available when the debt collector calls. Our advice is that, once you have gotten out from under your debt and everything is paid off (no matter how it’s done), you remember how difficult it was and keep from going into debt again in the future.