Fair Debt Collection

Fair Debt Collection is such an important topic the we have added a special dedicated section that focuses on fair debt collection practices exclusively.

In today’s rough financial times it is very common for people to fall behind on their bills, and find themselves in debt collection from Collection Agencies. It is important to educate yourself and know your rights for Fair Debt Collection.

The Fair Debt Collection Practices Act, aka “FDCPA”, was passed by Congress in 1978 to respond to abusive conduct by collection agencies and debt collectors.

The types of debts that are covered?

It covers personal, household, and family debts, including money you owe on a personal credit card account, an auto loan, a medical or hospital bill, and a home mortgage. Fair Debt Collection Practices Act does not cover debts you incurred to run a business.

Is it fair for a Debt Collector to contact me any time or any place?

No. A debt collector or Collection Agency may not contact you at inconvenient times or places, for example: Before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if you inform them that you are not allowed to receive phone calls at your place of employment.

What is considered to to unfair and unethical practices of a Debt Collector?

Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:

* Use threats of violence or harm of any kind;
* Publish a list of names of people who refuse to pay their debts beside reporting it to credit reporting agency
* Use obscene or profane language
* Repeatedly annoy consumer on the phone.

Use of any false statements. Debt collectors may not lie when they are trying to collect a debt. Examples of unfair behavior.

* Falsely claim that they are attorneys or government employee
* Falsely claim that you have committed some sort of crime
* Falsely imply that they work for a credit reporting company
* Misrepresent the amount of debt
* Indicate that papers they send you are legal forms if they’re not.
* Indicate that papers they send to you aren’t legal forms if they are.

Debt collectors also are prohibited from saying that:

* You will be arrested if you don’t pay the debt
* They will seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so, or
* Legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.

In addition, Debt collectors may not

* Give any false credit information about you to anyone, including a credit reporting company
* Mail you anything that looks like an official document from a court or government agency if it isn’t, or
* Use any false company name.

Engage in unfair practices attempting to collect a debt.

* Trying to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law allows such a charge
* Deposit a post-dated check earlier than dated
* Seize or threaten to take your property unless it can be done legally
* Attempt to contact you via postcard

These are the federal guidelines, be vigilant, and make sure to check your state and local laws regarding debt collections. Check back often as we update consumers on all facets of the Fair Debt Collection Act.

If you feel your rights have been harassed, you can file a complaint with the federal trade commission. This is the Agency that protects America’s consumers from being unlawfully violated. You can recover damages from Debt Collector that violate your rights. It must be one year from the date of the violation and you may file a lawsuit against the Debt Collector. You could receive up to $1,000 in addition to actual damages and attorney fees.

The debt collection statute of limitations varies greatly state to state. It can range anywhere between 3-15 years. You need to check your state laws to be absolutely sure. Do not confuse the credit report time limit, which is 7 years for a debt.
Although, bankruptcies are reported for 10 years and tax liens can be reported for up to 15 years.

Sometimes when the statute of limitations has expired, some debt collectors will still try like weasels and attempt to collect the debt. They are hoping you are ignorant of statute of limitations law and you’ll pay them anyway.

Anytime you take action on an account you automatically restart the statute of limitations. What constitutes action on an account? If you make any kind of payment, or enter into a payment agreement restarts the statute of limitations on an account no matter how old that account is. For example, if the debt collector talks you into making a payment after 6 years of inactivity it resets to zero.

Can a debt collector garnish my bank account or my wages?

If you are in default on a debt, the creditor or its debt collector generally can sue you to collect damages. You must be served to appear in court. Now, if they win the case the court will enter a judgment against you. The judgment states the amount of money you owe, and allows the creditor or collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.

Wage garnishment is when your employer withholds part of your compensation, to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a lawsuit summons. Make sure you appear and be represented by an attorney if you can. You can contest the a wage garnishment in a court of law.

Can Federal Benefits be garnished?

These Federal Benefits are exempt from garnishment, including:

* Social Security Benefits
* Supplemental Security Income (SSI) Benefits
* Veterans’ Benefits
* Civil Service and Federal Retirement and Disability Benefits
* Service Members’ Pay
* Military Annuities and Survivors’ Benefits
* Student Assistance
* Railroad Retirement Benefits
* Merchant Seamen Wages
* Longshoremen’s and Harbor Workers’ Death and Disability Benefits
* Foreign Service Retirement and Disability Benefits
* Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S.
* Federal Emergency Management Agency Federal Disaster Assistance

Keep in mind that federal benefits may be garnished under certain circumstances, paying delinquent taxes, Alimony, Child Support, or Student Loans.

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Know More About Debt Collection

Chances are one in a million that most people don’t know who or what a ‘debt collector’ is; well, at least one in a few thousands! When most economies faced recession and debts mounted, there were millions of people left with undervalued assets who faced hardships facing rising costs and tackling debts that had mounted.

The introduction of ‘plastic money’ or Credit Cards created a huge marketplace even for people without the actual money to go out and shop for things without a care in the world. Suddenly the consumer became “king” and every bank or commercial agency was issuing credit cards to anyone who could substantiate some kind of income proof. Soon many found themselves in debt beyond their limited incomes.

That’s where the debt collector makes an entrance! A ‘debt collector’ is the term used to denote a person or agency that regularly collects debts owed to creditors. Debt collection is the practice carried out by money lenders and creditors to secure payments from individuals and businesses that are bound legally to repay the money they owe. Every debt recovery agency or debt collection agency should be aware of the regulations involved and the legal obligations involved in collecting debts.

Debt collection covers any unpaid bills or unpaid amount accumulated against personal payments like credit card account, vehicle loan or mortgages, medical bills, household debts etc. This usually involves a single individual known as collector or an agency known as a collection agency. The business of such an agency that functions as an ‘agent of the creditor’ is to pursue debtors who owe sums of money to creditors. They collect debts for a fixed fee or for an agreed percentage of the total sum owed by the debtor.

There are various types of debt collection agencies.

• First party agencies – often they are direct agents like paid employees or subsidiaries of the creditor (an individual or company)

• Third party agencies – these are outside agencies contracted by a creditor company or individual to pursue the debtor and collect the amounts owed; the service is done for a fee.

In some cases, ‘debt buyers’ purchase delinquent debts at a pre-agreed percentage of the value and then contact the debtor to collect it, usually with a mark-up both ways to cover costs.

Globally, every country has its own set of rules and regulations covering debt collection. Every country has put in place consumer protection laws to protect consumers against malpractices by debt collection agencies. Several consumer protection agencies worldwide advise consumers and customers to be educated and informed about the laws concerning debts; ‘knowledge is power’ to safeguard oneself.

In spite of laws being in place to regulate debts and debt collections, instances of debt evasion by debtors and harassment by debt collection agencies are mounting. Debt collectors cannot engage in illegal or misleading practices such as deception and falsified information about the amount of money owed in debt, pose as a lawyer or attorney, etc.

Common examples of harassment by debt collection agencies are:

• Annoying and repetitious phone calls to the debtor or debtor’s family members

• Use of obscene or rude language

• Threats of physical harm, violence or causing fright and anxiety by threatening legal action

• Publishing information of debtors in publications

• Hiding their identity and infringing upon the privacy of a debtor

There are regulations to ensure consumer safety and protection. If the debtor is in dire financial situation, a third-party intermediary like an advocate or attorney can liaise between the collector and debtor and arrive at a settlement scheme that is acceptable. If however, the consumer or the debtor sues the collector for any violation under established laws and wins a case, the debt collector is bound to pay all legal fees and any damages caused to the debtor.

However, the best advice offered to a debtor is to know his or her debts fully, keep records of payments made and generally maintain an open way of communication with the collection agency to prevent unwanted anxiety and unpleasant situations.

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Debt Collection Management System Types

Debt collection is a difficult thing. There are many debt collectors who will never see the money that is owed to them. This is because it is not very difficult for a debtor to ignore the attempts by a debt collector to contact them. Unpaid debt has become such a problem that many debt collectors have had to a develop management system to make sure that their debt is collected. This system is also commonly referred to as a debt collection management system.

A debt collection management system will not actually collect the debt, but it does offer a lot of help to those who are trying to collect it. A debt collection management system is what many debt collectors or business owners use as a guideline for collecting debt from their clients. This debt collection system may include a debt collection software program and other methods that an individual must use to collect debt from one of their clients.

A debt collection company or an business collecting their own debt can develop their own debt collection management system or they can purchase a debt collection management system template. The majority of debt collectors or business owners generally prefer to develop their own debt collection management system. This is because it allows business owners or debt collectors to only apply certain debt collection tips and procedures to their business while eliminating the ones that may not apply.

Debt collectors or business owners who develop their own debt collection system are likely to take into consideration what type of debt they are trying to obtain and on average how much that debt is. The larger the debt that is trying to be obtained the more likely it is that a debt collection management system will be developed. Debt collectors or business owners who often create their own debt management system have more money to loose by not developing the system. Although developing a debt collection management system does not guarantee that the debt will be collected it does increase the chances. This is because many debt collectors following a debt collection management system are more likely to be more through when trying to collect the debt because they are following a set of guidelines

A business or an individual debt collector who would like to develop their own debt collection management system, but do know where to start can purchase a template. These debt collection system templates often come in a downloadable computer program; however, it may also be able possible to purchase printed templates. Debt collection management system templates are likely to have a wide selection of different debt collection techniques and methods. Debt collectors or business owners can generally select the techniques and methods that they want to apply to their system from the list provided by the template. A template is a great way for business owners to develop a debt collection management system when they are unable to come up with their own.

A debt collection management system has been proven to increase the likelihood of a debt being paid off. Each business owner or debt collector is likely to see their own individual results; however, if used in the proper way these debt collection systems are a great way for business owners to reclaim the money that legally belongs to them.

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