subject: Unsecured Debt: Collection Guidelines [print this page] Know what to expect with the collection process when you fall behind with your unsecured debt. Many companies will send unpaid balances off to collections who will attempt to work out a payoff agreement with you. Most people get very uncomfortable receiving letters and phone calls from these debt collectors. When you know what to expect, you will be prepared to tackle any person or company pursuing payment on your debt.
For starters, you need to understand who could possibly be calling you. When you stop making your payments to a creditor, the creditor will usually try for about 180 days to get a payment from you. Some companies will have their own collections departments who will try for a while longer. Collections agencies will eventually take over trying to collect. These people will earn a percentage of what gets collected. There are also lawyers who regularly collect debt. If your creditor is unsuccessful collecting money from you, your debt can be sold to collection companies and they will work on getting that amount back from you.
Whomever comes collecting, there are rules and guidelines which they must follow to preserve consumers' rights. The Fair Debt Collection Practices Act was set up to regulate how collectors function.
A debt collector may:
*Call between 8:00am and 9:00pm - unless you have made other arrangements with them.
*Call other people trying to find out your name, address and place of employment. They are only supposed to call one time and may not discuss your debt with them
*Send letters requesting payment. You may send a request in writing, certified with a return receipt from postal service to ask them to stop contacting you.
*Call your work looking for you. If you get on the phone and tell them that they may not call you at work, they are supposed to stop.
A collector may not at any time:
*Contact once you have an attorney representing you
*Harass you
*Threaten violence or harm
*Intentionally try to embarrass you
*Use profane language
*Falsely represent themselves
*Threaten property seizure without a court judgment
*Threaten court proceedings without any intention of doing so
*Send you postcards
*Indicate letters sent are legal forms if they are not
These rights are set up through the Fair Debt Collection Practices Act. If at any time you feel that your right are in jeopardy, you have a right to file a complaint through your lawyer. The good news is that most debts have a statute of limitations. The state you live in has set a time line on how long a collector can make attempts to collect.
Before you debt goes to collections, you will want to do your best to work out a payment plan with your creditor. The creditors will work with you to set up a payment plan that you can afford to pay. Letting them know before you fall behind gives them more incentive to work with you and will save your credit history. Having creditors come after you is an annoyance to you and those in your life. Know what is coming and try to prevent your debt from reaching that point. If you feel that you will be heading towards bankruptcy, get your lawyer pronto to divert the phone calls and letters. If you have the ability to pay your debt back but are just struggling to make everything work for you, find a debt counselor who will help you create a budget and teach you how to make it work properly.
