Debt Advice Video #6
Your Rights When Dealing With Debt Collectors
Hi. I am Licensed Debt Adjuster and Loan Modification specialist Damian Falcone, here with part two in our video series on debt collection providing consumer debt advice. In part one we talked about what debt collectors can and cannot do. In this credit management and debt management segment, we will discuss your rights when dealing with collection agencies.
This is Get Settled - your source for consumer debt advice and debt settlement information. As always, for even more information, go to www.falconcreditmanagement.com.
Once a debt has entered the collections phase, you will likely be in contact with a debt collector. As we discussed in part one, the practices of debt collectors are governed by federal laws prohibiting abusive collection practices, and mandating certain practices by the collection agencies. These laws also discuss certain things that you can do to protect yourself when dealing with a collector. In an Episode to follow I will show how to draft a Checklist so you can easily document any violations.
Perhaps the most basic thing you are allowed to do is to negotiate your debt. Most debt collectors are authorized to set up payment plans and settle debts for less than the ending balance, and if this is an option for you, then go ahead and negotiate but be careful about receiving any debt advice from the debt collector.
John S: I enjoyed negotiating – I knew how to do it…to walk someone into saying something I could use against them and we tape recorded everything – That’s what we call the beginning of the end!
– Make sure that any settlement is actually workable – it will do no one any good to agree to a payoff that is not feasible given your financial situation. Also, make sure that any agreement is confirmed in writing.
John S: I was only concerned with getting a payment (getting them hooked) then if they defaulted I could hold that over them! And if I could get someone to make payment without paperwork it was a free commission – I called it a “Servicing Fee”
If negotiation is not an option and the collectors will not stop harassing you, the quickest way to get the calls to stop is with a cease and desist letter. A simple letter stating that you wish all communications to cease should be enough to stop any further phone calls and harassing letters – In an Episode to follow I will show how to draft a Cease and Desist Letter. This does not mean that the collections activities will stop, and there is still the possibility that the collection agency will pursue legal action against you. To guard against this, you can retain an attorney or reputable debt settlement company to aid you in your negotiations. This stops the debt collectors from contacting you personally, but they can still speak to, and negotiate with, your legal representative.
John S: Cease and Desist like anything else went in the trash if it wasn’t certified and then maybe still, Unless it came from an attorney. I knew it was going to cost someone money to enforce it and most people wouldn’t.
Debt Advice: If you look into a Debt Settlement company you should look for 1 that includes these services as a package – bc they can really add up… in NV it is illegal to charge more than 250 opening fee and good companies will include these services in that fee.
In addition to the cease and desist letter, there is another useful tool to keep collectors honest – the written request for verification. In an Episode to follow I will show how to draft a Request for verification Letter.
John S: ??what would happen if you received??
Federal law provides that at the outset of an attempt to collect a debt, a letter must be sent notifying you that you have 30 days in which to request documentation showing that the debt is legitimate. Once you make this request, all collections activities must stop until the request is responded to. This will force the debt collector to get relevant documents from the original creditor, including any remaining copies of the original contract and account statements evidencing the debt. These documents that you will receive can be very helpful in making sure that the debt collector is going after the right person, and in verifying that the amount that they are seeking is correct. If you notice any billing errors or discover that they have the wrong person, notify the collector in writing immediately - In an Episode to follow I will show how to draft a Notification Letter.
Finally, if there is simply no way to settle the outstanding debts that you owe, the last sure way to stop a collector from contacting you is to file bankruptcy. Please see our series on Bankruptcy protection or seek out a licensed attorney to discuss your bankruptcy options.
John S: People love saying they are going to Bankruptcy – I would put it in my notes and use it on them later – it was as good as money!
In the next part of this series, we will go one step further and give some debt advice about what to do when dealing with an unethical debt collector who won’t stop the harassment and continues with illegal activities.