Charged Off Debts and Debts in Collections – What Can Collectors Do To Me?

You are behind on a credit card or other unsecured loan (a loan that does not have any collateral like a car, boat or house). And the first call from a debt collector has come into you. What is their next step? Can they put you in jail? Can they sue you? Can they threaten to call your boss and have you fired?

Since I had 12 credit cards and one personal loan in delinquent status back in 1998 and 1999, I know what you are going through. The fear of the unknown is probably very large 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 with handcuffs. We do not have debtor prison in the USA. In fact it is a violation of the FDCPA (Fair Debt Collection Practices Act) for anyone to threaten you with arrest!

2. The debt generally does not get sold to a collection agency until you have been late for six months.

Your creditor is hoping to get payment from you. But after 180 days, he has to clean up his books. So he will transfer or sell your debt to a collection agency. This is called a charge off. This does not mean that your debt has been wiped out! It is an accounting term; your debt still remains.

3. You can control the collector’s phone calls to you.

Collectors can only contact you during reasonable hours, which generally is 8am-9pm your time. If you do not want to be called anymore, either at work, at home, or both, you must get the mailing address of the collection agency and send a notice to stop calling, IN WRITING. Some collection employees are good about putting notes in your file to stop calling but many are not good about this. I recommend that you send this Certified with Proof of Mailing in case they continue to call you. That way you have proof to threaten them with legal action for violating the FDCPA.

4. You can control the collector’s mailings to you.

Same as the phone calls. If you send them written notice to not contact you by mail, they must stop. Though they legally can send you two more notifications. One, they received your notice and will stop contact with you. Two, they are taking an action against you, such as a lawsuit. Everything else will stop.

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

Generally only if they cannot find you. This is called skip tracing. Legally the collector can only discuss the debt with you, so he will use phrases like “It is very important that I speak with ____” or “Please have ____ call me as soon as possible.” They will try to get your phone number or address.

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

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

6. The collector cannot threaten to sue you.

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

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

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

A collector usually will not spend the money to take you to court if you have no assets that he can get to. This is called being judgment-proof. So if you are unemployed and have few assets, the judgment is all bark and no bite.

Hopefully this relieves the fear of the unknown for you. So if a collector calls, do you want him to stop? Do you want to negotiate the debt with him? Do you see yourself as judgment-proof so the debt will never be collected? You now know what can and cannot happen to you if you do not settle or pay off your debt. Sleep peacefully tonight!

Get Relief of Debts Through Debt Relief Consolidation

When you think of debts, the first feeling you get is that of a confused person looking for help desperately. Having a debt not only messes up your financial life but also your mental health. When you feel your savings is in the negative for many months and you are only paying the minimum amount due every month, then its time to seek debt relief help. There is debt relief help available to you rather easily.

Debt consolidation of different types can help you get relief of the extra interest that you pay. The debt relief consolidation is all about consolidating your debts in one account that will make you pay less every month so that you can pay more than the minimum amount due and pay off your debt eventually. debt relief consolidation can change your life totally and make it debt free. It can help you consolidate any kind of debt. The debt may be a loan or credit card dues from different credit cards. No matter what they are, consolidation will not only make you remember them but you will also pay lesser interest.

Debt consolidation is one thing that can be done by you too. But it is possible that you do not have contact with the loan providers with less interest rate or they may not offer you the same rate as they would offer to the debt negotiating companies. Debt negotiating companies can not only help you consolidate the debt but can also help you to get relief of unsecured credit card debt through the service. It is possible to get a huge discount in the amount you need to pay and you may need to pay this in easy installments too.

Getting Help with Payday Loan Debt Settlement

A family vacation, an unexpected car repair, or a long pending renovation at home, when in need for money on such occasions, you are more likely to depend on the payday loans to bail you out. Being easily available and when in need, you do not bother to worry about the high interest rates that it entails. The notion then is that you did be closing it down soon or by the next payday. But by the next big day, you realize that you are just good enough to repay the interest and not kill the debt and need help with payday loan debt. You had got one of the draconian loans to tide through a temporarily difficult period but now you are in a tough spot.

When looking for help with payday loan debt, there are options galore, but no magic potions. Firstly, it would serve your purpose if you try getting helping hands of friends, such lending service with negligible interest would provide great help with payday loan debt repayment. If you do not find any good Samaritans then taking up a part-time job would help in such trying times.

For planners, it would have served your purpose if you had built an emergency cash fund in the savings accounts. But then you can always do that now, so that you can avoid such a misery later. You can even try to negotiate a payment plan with your lenders and try for debt settlement. One more effective help with payday loan debt but risky one for sure would be bankruptcy, if the situation demands such a step then there is no harm taking this route, especially if you cannot even pay your interest and your debts are more than assets. For such a step, you did have to take to legal eyes help. So, with couple of debt settlement strategy, you can tide out of the payday loan, but best thing would be to never find yourselves in such a situation again.