Burdened with Debts and Debt on Collections: What Can Debt Collectors Do to Me?

You are behind on a credit card or other unsecured loan (a loan that has no collateral like a car, boat, or house). And you’ve received the first call from a debt collector. What is your next step? Can they put you in jail? Can they sue you? Can they threaten to call their boss and fire him?

Given that he had 12 credit cards and a personal loan in default in 1998 and 1999, I know what he’s going through. The fear of the unknown is probably too great for you right now. Get some peace of mind! I will explain what can and cannot happen to you.

1. You will not go to jail for not paying your loan.

The police will not show up at your door in handcuffs. We do not have a debtor prison in the US In fact, it is a violation of the FDCPA (Fair Debt Collection Practices Act) for someone to threaten to arrest you.

2. Debt is generally not sold to a collection agency until it has been late for six months.

Your creditor expects to receive your payment. But after 180 days, you have to clean your books. Then he will transfer or sell your debt to a collection agency. This is called carry. This does not mean that your debt has been eliminated! It is an accounting term; your debt still remains.

3. You can control the debt collector’s phone calls.

Pickers can only contact you during reasonable hours, which are generally 8 a.m. to 9 p.m. your time. If you do not want to be called anymore, either at work, at home or both, you must obtain the postal address of the collection agency and send a notice to stop calling, WRITTEN. Some collections clerks are good at putting notes in your file to stop calling, but many don’t get it right. I recommend that you send this Certificate with Proof of Mailing in the mail in case they continue to call you. That way, you have evidence to threaten them with legal action for violating the FDCPA.

Four. You can control the emails that the collector sends you.

Just like phone calls. If you send them a written notice not to contact you by mail, they should stop. Although they can legally send you two more notifications. One, they received your notice and will stop contacting you. Two, they are taking an action against you, such as a lawsuit. Everything else will stop.

5. They will contact your family, employer, and possibly friends.

Usually only if they can’t find it. This is called skip tracking. Legally, the debt collector can only discuss the debt with you, so they will use phrases like “It is very important that you speak to ____” or “Please ask ____ to call me as soon as possible.” They will try to get your phone number or address.

Your family and friends can tell the collector to stop calling them.

If your employer does not want you to receive telephone interruptions while on duty, the debt collector is supposed to stop calling. Which makes sense because the debt collector has zero chance of getting money from you if you get fired!

6. The debt collector cannot threaten to sue you.

The key word here is “threaten”. If the debt collector has started the legal paperwork to take you to court, then he can tell you because it is a fact, not a threat. So if you get this call or letter, take it very seriously.

7. If the collector wins in court, he will get a judgment against him.

The judgment is what allows a collector to legally garnish your wages, garnish your bank account, place a lien on your home, and even sell your car to collect the debt. You cannot garnish social security payments, retirement accounts, disability payments, etc.

A debt collector will generally not spend the money to take you to court if you do not have assets that you can access. This is called being judgment-proof. So if you’re unemployed and low on assets, judgment is all bark and no bite.

Hopefully this will ease your fear of the unknown. So if a debt collector calls, do you want them to stop? Do you want to negotiate the debt with him? Do you see yourself as proof of judgment so that the debt is never collected? Now you know what can and cannot happen to you if you don’t settle or pay off your debt. Sleep soundly tonight!

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