What To Do If Sued By Debt Collector

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Home > Debt > Collection Agencies and Your Rights > 13 Ways to Deal with Collectors and Agencies

What To Do If Sued By Debt Collector

The debt collection industry makes $11 billion a year from the 70 million Americans who don’t or don’t pay their bills.

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Debt collectors make most of their income from people who are hopelessly behind on student loans, medical bills, car loans, credit cards and mortgages. Some forms — especially student loans and medical loans — go so fast that many consumers don’t realize they’re behind until they get a call from a collection agency.

Collection agencies are often the most intimidating, demanding and persistent in trying to extract whatever money you have to satisfy you. Trying to collect money you don’t pay can be aggressive, but some people still pay, and avoid contacting collection agencies.

Before you discuss anything with the collector over the phone, ask for information in writing. Collectors are notorious for giving misleading information over the phone. A paper trail documenting this term will be warranted.

The Fair Collection Practices Act requires collectors to give you written notice within five days of initial contact. The notice should state the name of the creditor, the amount you owe and tell you about your right to share.

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After you receive written notice, you have 30 days to object in writing. A protest letter accomplishes a number of things. The important thing is to end the call and buy time to explain the second. Collectors cannot call or contact you until this is confirmed in writing.

In March 2018, the Federal Trade Commission released a report on consumer complaints that found consumers complain about aggregators more than any other company.

The group was responsible for 23% of the 2.68 million customer complaints. That means the FTC has received more than 600,000 complaints from people fed up with how they’ve been treated by collection agencies.

If you have a complaint, go to the FTC website, click on Credit and Category, then click on Billing Methods. A form will appear requiring you to fill in the required information.

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It would be great if you prepared it with specific information about the time, place, person’s name and company of the call. If possible, have a witness with you during the call to testify to the validity of your complaint.

The FTC has another page on its website that lists more than 100 companies and individuals it has banned for illegal practices.

You can file a complaint with the Consumer Protection Agency, your local attorney general, or the Better Business Bureau.

One way to find out before you default—and invite collection agencies to come after you—is to consider using one of the methods available in a consolidation plan.

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There are three types of integrated plans: management plans; Consolidation Loans; and regional planning. Each is designed to help consumers deal with credit card, housing, auto and student loan issues.

The first step in a plan is to contact a credit counseling agency, preferably a non-profit organization, that will analyze your income and expenses and advise you if there is a plan to use to get rid of it. Signing up for one of these plans, especially management plans, can be a better solution when trying to deal with collectors.

Nowhere is the concept of “knowledge is power” more important than in the museum field. People who are less knowledgeable about their consumer rights, debt collectors will take advantage of debtors who default on their past obligations.

The situation became so dire that the federal government had to step in and pass laws to protect consumers. The Fair Debt Collection Practices Act (FDCPA) and the Fair Collection Accounts Act (FCBA) are part of the Consumer Credit Protection Act, which outline what is acceptable and prohibited for debt collectors. The law also sets out the rights and remedies available to consumers who are subject to collection. In short, the law protects consumers—a right that debt collectors may not be aware of.

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The Consumer Financial Protection Bureau (CFPB) said it handled 84,500 debt collection complaints in 2017. Of those, 39% involved efforts to collect money from customers who claimed they had no debt. Another 13% had to engage in communication methods of making repeated phone calls at inconvenient times of the day. Collection agencies aren’t likely to share anything when you call them, so here’s a roundup of 10 rules they’d rather you not know.

If you don’t want to communicate with collectors by phone, there’s an easy way out: Send them a cease-and-desist letter by certified mail saying you no longer want to contact them.

If they continue to call you after that, they are violating the FDCPA, which will get them in trouble with the federal government. Keep a record of all calls and letters received from them. Write down the time and date they called and the name of the agency. Save voicemails and correspondence, including those you send.

If you file a cease and desist letter, that doesn’t mean they won’t try to collect the file. This means they cannot call you to discuss it. Check the mail for a summons or court order as they may try to settle it through court. If you have an attorney, direct all calls and letters to your attorney.

How To Deal With A Lawsuit From A Debt Collector

Collection agencies may send negative reports to consumer reporting agencies, which can negatively affect your credit score.

The thing is, you don’t have to work with them at all, including not talking to them.

If you want to settle the matter with the collection agency, you or your attorney can negotiate an agreement. First, see how much you can afford to pay and whether the collection agency will accept the amount. Payments can be in lump sum or monthly payments.

If possible, discuss at the end of the month. Debt collectors often have deadlines and monthly goals to meet. If they are desperate to achieve any of these goals by the end of the month, they may be more willing to negotiate.

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If the collection agency agrees to your terms, get them in writing before you pay. There should be written evidence of the amount due and due date.

Creditors have a certain amount of time – 4-6 years in most states – to collect before the statute of limitations expires and they can no longer obtain a judgment against you. You still owe the money and debt collectors can still try to collect it from you, but they will lose the help of the courts in their collection efforts.

If you pay or agree to a payment plan, you can turn back the clock on the statute of limitations.

If you’re not sure whether the statute of limitations applies in your case—laws vary from state to state—ask the collection agency if you’re a “first time,” which means the statute of limitations has expired.

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Never claim it as yours over the phone, email or in court. It can reset the expiration date.

The only call worse than a call from a collection agency is from a fake collection agency.

Fake debt collection agencies use the same scare tactics, threats of arrest, and the same claims they’ll tell family members if they don’t pay them. Often, bogus debt collection agencies attempt to collect on “phantoms” that are too old to collect or have never been proven legitimate.

The Federal Trade Commission (FTC) shut down two fake debt collection agencies in Miami in 2014 that sold Latinos $2 million. The FTC warned consumers that these types of scams are spreading to communities across the country.

How To Communicate With Debt Collectors

Fake collection agencies find or use the same methods as real ones: databases that sell personal information; mailing list; Information from loan applications; contact relatives, friends or employers; and the shipping address from the post office.

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