Collection Consumer Debt Law
Consumer Debt Settlement Advice - Pros and Cons of Getting a Debt Settlement
When facing bankruptcy, most people prefer to negotiate with creditors and reach a settlement of their debts. But this can have both positive and negative effects on your financial health. Although an attractive option, debt settlement has its own set of pros and cons.
The most attractive and important result of opting for debt settlement is that the payable amount is reduced by almost 40% to 60%. Financial institutions give debtors this option because they get a lump sum amount. One payment will end the stress associated with collection calls. Moreover, if you negotiate well the creditors may also waive off the interest amount on the total debt amount. They may also waive off the penalties and late payment charges. Creditors may also allow him or her to pay the reduced amount in easy monthly installments. The creditors are very accommodating to the debtors nowadays. This is because they understand that if the debtor files for bankruptcy, they will not get any money. They also give remarks which help in rebuilding a debtor's credit scores.
On the other hand there are a few cons associated with debt settlement. For instance, there may be trouble if a loan is a secured one and the debtor has pledged any assets as security for the loan. The creditors can file a law suit against the debtor and reclaim their money by attaching his or her assets. IF this happens it will affect your credit scores negatively. If in the future you apply for a loan, it may be rejected. Hence, one should weigh the pros and cons well before opting for debt settlement.
If you want to get out of debt and hire a debt settlement company for debt negotiation then I have an important piece of advice. Do not go directly to a particular debt settlement company but rather first go to a debt relief network who is affiliated with several legitimate debt companies. In order to be in the debt relief network, the debt settlement companies must prove a track record of successfully negotiating and eliminating debt. They must also pass an ethical standards test. Going through a debt relief network will ensure that the debt company you are provided with is a legitimate and respected company. This is the most efficient way in finding the best debt settlement companies and increasing your chances of eliminating your debt.
FreeDebtSettlementAdvice.com is one of the largest and most respected debt relief networks on the marketplace today. To find a debt settlement company through FreeDebtSettlementAdvice.com check out the following link:Free Debt Advice
About the Author
Freedebtsettlementadvice is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.
http://freedebtsettlementadvice.com
Debt Law- What You Should Know
Many consumers do not have the knowledge or do not know what laws are there to protect them when they are in debt. It is important for any individual to know their legal rights so that creditors do not take advantage of the situation and leave you worse off than you already are.
If your creditors have hired the services of a debt collector or a debt collection company then you need to know a few ground rules before you can give into their demands. The first thing, you need to know is how the debt collector is allowed to contact you. They may be in touch with you via phone, e-mail, telegram, fax or mail as long as the time and the place are convenient. They may also contact you in person as long as the terms have been agreed to by you and the creditors.
Every consumer should be aware that debt collectors are not allowed to talk about your debt to friends or family members. If a lawyer is representing you, then he should contact the lawyer on your behalf. The only information, a debt collector is allowed to collect form other people, may be your home address or phone number. They are allowed to contact other parties besides you, only once.
Should a debt management plan fail to work for you and your creditors fear you have no assets to repay them; they may file a bankruptcy suit against you. At this point bankruptcy proceedings are unavoidable, but it is up to you to know what your legal rights are. You should know you have a choice to file either a chapter 7 suit which stated that all your assets are liquidated but you are debt free or chapter 13 which allows you to keep your assets and have a payment plan with the creditors.
About the Author
Mercy Maranga writes content on Finance and Debt Management. Visit her site here for more information on Finance and how to effectively Manage your debts.
Debt
Filed under Debt Settlement by on May 15th, 2010. Comment. 
Collection Debt Lawyer
Debt Collection Process
No one is free from becoming indebted, but people with impulsive behaviors and compulsive buyers are the most prone to fall into great amounts of debt. After this happens, specialized agencies start the collection process.
The most common collectors are attorneys who, on a regular basis, collect debts. According to the 1986 amendment of the Fair Debt collection Practices Act, said lawyers are considered debt collectors.
Now we know who the collector is. So who is the debtor? A person who:
- owes a personal loan
- uses a credit card (let us presume that is a excessive use)
- is actually paying a home loan (home mortgage)
By law, how does the debt collection procedure work?
The collection responsibility rests on the hands of the designated attorney. How he collects money from the debtor is also his responsibility. No forceful means will be allowed. The Fair Debt Collection Practices Act demands a fair treatment to any debtor. Lawyers cannot use any threatening method to collect the money involved.
Can a lawyer or collection agency harass me?
By law, no lawyer or collection agency can harass a debtor. According to the law, any debt collector is restricted from exercising any threat of violence or causing any damage to a debtor. Collection agencies are forbidden to publish any debtor's name in public nor can they harass debtors by phone. People should know that the law is on their side.
Debt collectors are not supposed to:
- collect an amount greater than the original debt
- previously deposit a post-dated check
- introduce themselves as government workers
- take away your house or property or threaten to do so.
- make false statements on government policies
- force you to accept calls
Whenever a debt collector brakes the law by practicing any of the aforementioned activities, punishment can be severe. You could also sue these lawyers, and you have one year to start the process. After winning the lawsuit, you recover the money because of all the damage suffered. You also receive the court costs and attorney fees. The law may protect you from harassment from lawyers, but it will not prevent you from paying your debts.
About the Author
James McGuire is an industry specialist and is associated with www.curadebt.com, a leading debt negotiation company providing debt settlement, Debt Settlement Services to recover your debts and prevent persecution from creditors.
Debt Collection Explained
Debt collection is the process by which a company or person who owns a debt now collects money (or other things of value) from the debtor so that the debt is repaid. In general, debt collection can be performed by the original creditor, or by a person or company that buys that debt from the original creditor. If you have questions about this matter, contact a debt lawyer Raleigh.
This page gives a general overview of the debt collection process, and the steps that you – the debtor – can take to protect yourself. If you have specific questions about your legal situation, contact a debt defense lawyer Raleigh
What is an “original creditor”?
An original creditor is the person or company or a subsidiary or agent of the company that originally lent you the money. For instance, if you originally borrowed money from General Credit, Inc., then General Credit, Inc., and any subsidiaries or agents of General Credit, Inc. are considered the “original creditor.”
What is a “debt collection agency” or “debt collector”?
A debt collector or debt collection agency is a person or company that collects a debt owed to another. In fact, in many cases, the debt now may be owned by the debt collector or debt collection agency. In simple language, a debt collector is someone who usually has purchased the debt directly from the original creditor or from another debt collector who originally purchased it from the original creditor.
A debt collector, as defined by the Fair Debt Collection Practices Act, is not the original creditor.
What’s the difference between a debt collector/debt collection agency and the original creditor? They’re both trying to get money from me!
The difference between a debt collector/debt collection agency and the original creditor is that two categories are treated differently under the law.
The Fair Debt Collection Practices Act (FDCPA) does not apply to the original creditor or the original creditor’s agents or subsidiaries. The FDCPA only applies to debt collectors and debt collection agencies.
Why does the Fair Debt Collection Practices Act (FDCPA) only apply to debt collectors and not original creditors?
When the FDCPA was originally put into law in the 1970s, Congress was trying to prevent abusive practices by debt collectors. Because the original creditor – places like Bank of America or Chase or BBT – have an interest in maintaining a good relationship with you, even if you may have defaulted on a loan, they typically do not engage in the worst kinds of harassing behavior. So Congress excluded them from the act.
However, debt collectors and debt collection agencies are people who have purchased the debt from a company like Bank of America, Chase, BBT and so forth. Although places like those banks sometimes try to persuade debt collectors not to harass their former customers, debt collectors don’t always behave.
After years of complaints, Congress sought to use the power of the law to regulate the behavior of debt collectors. This law – the Fair Debt Collection Practices Act – can be your tool to stop the abuse and harassment.
What if the Original Creditor is Behaving Improperly or Abusively?
If the original creditor is behaving improperly, illegally, or abusively, you do have other remedies. For instance, North Carolina has a very strong, pro-consumer Unfair and Deceptive Practices Act which does apply both to the original creditor and to subsequent debt collectors. That act can give you remedies against abusive or illegal practices by original creditors.
Why does a Debt Collector now say I need to pay his company, and not the original lender or original creditor?
Usually after 180 days of delinquency (for revolving accounts such as credit cards) or 120 days of delinquency (for installment accounts, such as an automobile loan), a bank must “charge off” the account, which means that the bank must show the account as a loss on its books. When the bank charges off the account, it almost always sells the account to a debt collector.
Debt collectors buy these accounts for pennies on the dollar. As of January 2009, a report by an industry group found that original creditors were selling “fresh” delinquent accounts for between 5 cents and 7 cents on the dollar to debt collectors. So if the debt was $10,000, a debt collector might buy that account for between $500 to $700, hoping to collect from the debtor the entire $10,000 and make a handsome profit.
Old accounts are being bought by debt collectors for less than a penny on the dollar.
If the debt has been sold by the original creditor to a debt collection agency or debt collector, the debt collector now “owns” the debt and has a right to collect on the debt.
Before paying a debt owned by a debt collection agency, you want to make sure that the debt collection agency can actually prove it owns the debt. In addition, you want to make sure that the debt is actually a valid debt. Sometimes debt collectors claim to own a debt, when they do not.
How does the Fair Debt Collection Practices Act (FDCPA) protect me and my family?
The FDCPA is designed to protect you, the consumer or debtor, from the bad behavior of debt collectors. Even if you own the debt and the debt is valid, the debt collector may not engage in certain practices in order to try to make you pay. In fact, you may still owe the debt, but may be able to win against the debt collector if the debt collector has violated the FDCPA.
In other words, the FDCPA doesn’t have much to do with the actual debt. What it governs are the ways that debt collectors must behave when they call, write, or contact you, the consumer.
What are the specific actions that the FDCPA regulates?
A debt collector may not:
1. Contact the consumer/debtor at an unusual time or place or a time or place known to be inconvenient to the consumer/debtor.
2. Contact the consumer/debtor after the consumer/debtor has notified the debt collector that the consumer/debtor is represented by an attorney.
3. Contact the consumer/debtor at the consumer/debtor’s workplace if the debt collector knows or has reason to know that the employer prohibits such kinds of calls at work.
4. Except in certain circumstances, contact other parties – like family, friends, employers, etc. – in pursuit of the debt.
5. Threaten violence or harass the debtor/consumer
6. Publish the name of the debtor/consumer, except to a consumer reporting agency like Equifax or Transunion.
7. Advertise the sale of the debt in order to coerce payment of the debt.
8. Cause a telephone of the consumer/debtor to ring continuously or repeatedly.
9. Make phone calls to the debtor/consumer without identifying themselves as debt collectors.
10. Make a false representation that the debt collector is an attorney.
11. Threaten to take any legal action that can’t be taken or that is not intended to be taken
This list is only a sample of the kind of things a debt collector/debt collection agency may not do to you, the consumer. There are plenty of other rules in the FDCPA regulating the conduct of debt collectors.
What happens if a debt collector does violate the FDCPA?
The FDCPA is a “strict liability” act, meaning that if your attorney proves the debt collector violated the act and the debt collector fails to assert one of a limited number of defenses, the debt collector is liable for damages of up to $1,000 per violation plus attorneys fees.
The risk of significant damages plus attorneys fees sometimes encourage debt collection agencies or debt collectors who know they have violated the act to settle, instead of taking the matter to trial.
What should I do if I suspect a Debt Collector is violated the FDCPA?
First, you should talk to a debt defense lawyer about the matter. A debt defense lawyer can find out whether the debt is owned by the original creditor or whether the debt collector now owns it. In addition, a debt defense lawyer can advise you of your rights.
Second, you should gather as many documents relating to the debt as you have. Save all correspondence you have received from (or sent to) the original creditor and from or to any debt collectors who have been involved with the debt. Save those documents; they will be very important as your case proceeds.
Third, make a call log. Every time anyone calls about the debt, note the Date, Time, Name of the Caller, Name of the Company the Caller Represents, and what the caller said. Don’t get into an argument with the Caller. Simply keep a log. That log is very important evidence that may later be used to prove harassment or misconduct by the debt collector.
About the Author
Damon Chetson is a consumer debt lawyer Raleigh who helps people filing for Bankruptcy under the United States Bankruptcy Code, and who helps people fight against creditors and debt collector Raleigh who engage in abusive and illegal activities.
Filed under Debt Settlement by on Apr 16th, 2010. Comment.
Collections Debt
Even Debt Collectors Have to Struggle Hard in These Times
This should be the best of times for debt collectors, since our society never has been so in hock and lot of people and businesses had to struggle hard to not be affected by the financial crisis. But ironically, much of the debt collection industry is struggling because they can't get blood from a stone. While there's little cash money left to squeeze from strapped consumers.
We need to face the truth - their industry is struggling just like the rest of the economy. As well as every other business the debt collection agencies are dealing with money - if the consumer has money the business booms but if not it is very difficult to run a proper business. That means that during an economic crisis conditions are likely to worsen as struggling creditors will find it even harder to recover debts from hard-pressed consumers.
When you just look at the number of new debt collections you might think that the business is booming, because the number of consumers who can’t pay their credit card and other bills is dramatically rising. But meanwhile when you look into the subject you realize that the conditions radically worsen because little cash is left and debt collector must end their activities empty-handed. The result is that many http://www.cbc-international.co.uk" title="Debt Collection">debt collection agencies losing money to cash-strapped consumers who can’t pay up and finally they are forced to cut back their workforce.
Times are tough and nearly every business is forced to rethink their strategies in order to survive. Not every new strategy is easy on debtors, but they are one step in a different direction to handle the difficult financial situation.
About the Author
Filed under Debt Settlement by on Apr 13th, 2010. Comment.
Sample Debt Settlement Letter
Filed under Debt Settlement by on Apr 9th, 2010. Comment.
National Debt Collection Agency
History of Consumer Complaints About Debt Collection Services
U.S. Debt Collection Agencies: An Industry Analysis Report
This report examines the $12 billion business of debt collection agencies. Complaints by consumers about harassment by collectors still exists and tops the list of complaints to the FTC. With the recession, it has gotten worse, since it has become more difficult to collect on (liquidate) accounts. Many consumers are out of work or struggling to pay for the necessities and have no funds to repay debts. ( http://www.bharatbook.com/Market-Research-Reports/US-Debt-Collection-Agencies-An-Industry-Analysis.html )
Collections is a fragmented business of 6,500 mostly small firms. Major consolidation has taken place amongst collections agencies since the late 1990’s, and one firm, NCO Financial Systems, now accounts for $1.5 billion in sales, by virtue of acquiring its biggest competitor (OSI Solutions). Technology is making firms more efficient and profitability had risen until the recession hit. After a period of strong growth from 1999-2004, top-line revenue growth has slowed substantially – only 1.6% last year. Future growth will have to come from untapped niche segments such as healthcare accounts, legal, cell phone bills, municipal government, and outsourced IRS tax debt.
The study examines industry revenues/growth, competitor profiles/rankings, consumer debt trends and industry issues, extensive operating ratios, etc. Covers national revenues (1987-2007 actual, 2008 & 2009 estimates, 2013 forecasts), latest Census data industry operating ratios. The study examines consumer debt trends, the debt buying market, outsourcing, status of IRS tax debt business, market segments, delinquencies and bankruptcy trends, and more.
To know more and to buy a copy of your report feel free to visit : http://www.bharatbook.com/Market-Research-Reports/US-Debt-Collection-Agencies-An-Industry-Analysis.html
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Easy Way to Get Back Your Bad Debts through Collection Agencies
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Every business or medical services often encounters customers,patrons, clients,or patients who don't pay their bills on time. The survey of Small Business Administration reports 75 percent of businesses have customers who either pay their bills late or never attempt to pay. There is a very effective way for business's to improve their debt collections. That is to outsource a some portion of their accounts receivable to a collection agency also known as collection agency outsourcing.
There are several easy methods to recover your Bad Debts:
Sale of debt
Sale of Debts is another option for creditors is to sell their debts to the fast growing debt buying industry. This helps the creditor in generating immediate revenue from their accounts receivables. It also save infrastructure costs associated with managing collection agencies. And help in avoiding the possible legal liability and public relations risks associated with debt collection. The origin of this practice has developed principally in the USA but now this market is burgeoning in the UK, Europe and Asia.
Debtors
The person who owes the bill or debt is called as debtor. The reason behind becoming debtors is because of a lack of financial planning or over commitment on their part or it may due to an unforeseen and uncontrollable event that disrupted their life. Examples which throw lights on the possibility of becoming debtor include the loss of a well paying job, an accident that leaves them unable to work, or a sudden and serious illness.
In commercial collection cases, the debtor is a type of business which includes sole proprietors, corporations, partnerships or individuals that incurred the debt for business purposes.
Advantages of Collection Agencies
- Collection Agencies save both time and money involved in debt collection
- Collection Agencies work within legal boundaries
- Collection Agencies assure fair chances of debt recovery as they are specialists in negotiating with debtors.
Disadvantages of Collection Agencies
- Collection Agencies may hamper the client’s reputation in their process
- Collection Agencies may prove to be expensive
- Collection Agencies do not guarantee success
- The process may be confusing to the debtor
About the Author
Author is a contributor writer for Collection Agency. Currently working with one of the leading Debt Recovry Agency and Commercial Collection Services providing company.
Filed under Debt Settlement by on Apr 6th, 2010. Comment.
