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Frequently Asked Questions about Debt Collection

Frequently Asked Questions about Debt Collection

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If you are in debt and dealing with debt collectors regularly you probably have a lot of questions about your rights, what might happen to your debt and how to get out of this situation.  You may be one of the many consumers’ suffering debt collector harassment.  Find out how to stop abuses done by debt collectors and get answers to the most frequently asked debt collection questions by reading below.

1. How can I make debt collector harassment stop?

Debt collector’s constant phone calls and demand letters can be overwhelming.  You can minimize the disruption by requesting that the collector not contact you at work or during inconvenient hours.  But an even better option is to make them stop contacting you altogether by hiring a debt attorney.  Once you are represented by legal counsel the debt collector is required to contact your attorney regarding your debt.  This will alleviate your daily stress and allow your lawyer to advocate on your behalf directly with the collection agency.

2. Can debt collectors talk to other people about my debt?

Debt collectors are only allowed to contact others in an effort to obtain your contact information.  They are not permitted to disclose details of your debt or discuss your debt with other people.  There have been instances where abusive collectors will talk to neighbors, employers and even family members in an attempt to force a person to pay.  This is highly illegal.

3. Can I go to jail for my unpaid debt?

No.  While unscrupulous debt collectors may try to convince you if you do not pay you will go to jail, this is not true.  Most unpaid debt is a civil matter and while the penalties for default are stiff, jail time is not one of them.   There are a few exceptions.  Unpaid child support and tax debt can still be punishable with jail time in some states.

4. A debt collector is trying to collect a debt I don’t owe, what can I do?

Currently, the responsibility to prove a debt is incorrect falls to the consumer.  There is legislation in the works to change this law so that the responsibility falls to the debt agency.  But in the meantime, if you find yourself at the wrong end of collection efforts for you a debt you don’t owe, you will need to prove the debt isn’t yours.  Make sure you organize all the information you can about the debt in question.  You will also want to send a letter to the creditor requesting verification of the debt.  The debt collector then has 30 days to send you proof of the debt owed.  As soon as the letter is received, the collection agency is forced to stop their collection efforts and send you the requested information.  If the collector does not adhere to these rules you have legal recourse. A skilled attorney can help you present this information to a debt agency and demand that they cease collection efforts. You can read the full article here.

5. Can I be sued for a debt?

Yes.  While debt collectors can’t threaten to send you to jail, they can threaten to sue, as long as they mean it.  A collector can’t make threats that they have no intention of pursuing.  However, if you default on a loan you can be sued for the amount that you owe in addition to interest and fees.  This process takes time but can happen.

6. Can debt collectors lie?

They are not legally allowed to lie to you or pretend to be someone else.  A debt collector is legally obligated to give his or her name, the company they work for and the fact they are trying to collect a debt.  A collection agent may describe actions the company intends to take against you, only if they genuinely intend to take those actions and they are legal.

7. What can I do if a debt collector is breaking the law?

You need to document everything and get legal help.  Every time you receive collection calls document the person’s name, what was said, the date and time. Keep all letters and correspondence.  If you have not already hired a debt attorney to assist you, please do so now.  Debt collection efforts may aggressively continue.  Your best recourse is to have legal assistance to combat illegal collection efforts.  In addition, if you are able to document these illegal practices you may be able to turn the tables and sue the debt collector.

8. Can I get a debt collector to accept a settlement payment for less than I owe?

Maybe.  As long as your debt is correct and hasn’t been discharged in bankruptcy, you are responsible for the full amount owed.  The debtor is under no obligation to negotiate with you.  However, a collection agency may be willing to accept a lump sum settlement payment that is less than the total amount you owe.  It may save them time and money to accept a one-time payment from you than to continue collection efforts with little return.  There are some consequences to a settlement.  It can still be reported negatively to the credit agencies and you may owe tax on any amount that the debt agency is willing to waive.

9. Are debt collections subject to a statute of limitations?

There is a statute of limitations, or time limit, on debts.  The statute of limitations can vary by state and can be reset by certain actions on your part.  Be cautious when dealing with old debts as they may be nearing their expiration date.   If you acknowledge the debt as valid or agree to pay it you may reset the clock on the statute of limitations.  Don’t give collectors the opportunity to continue to pursue you if your debt is nearing its expiration date.

Being in debt can be incredibly stressful and challenging to overcome.  A skilled debt attorney can educate you on your rights, protect you from illegal debt collector practices and help you resolve your outstanding debt.  If you are dealing with debt, please call and get help to get your finances back on track.

Frequently Asked Questions about Debt Collection was last modified: November 22nd, 2016 by Kevin Fallon McCarthy
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Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.
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