Debt and Debt Consolidation

Consumers are federally protected in their dealings with collection agencies who must abide by these rules or face possible fines or sanctions. If you want to take control when facing debt collection efforts, you need to know your rights related to such actions. Here’s some rules to consider.

Termination of Contact

If you have been contacted by a collection agency, you can instruct them to submit all communication through your lawyer and for them not to contact you directly. They must comply, as long as your lawyer responds to their efforts or if they want to inform you that you are either being sued or that your debt has been canceled. Another option is to insist on dealing only with your original creditor to settle you debt instead, then reopening those negotiations.

Intent to Follow Through

Collection agencies cannot threaten you with actions they do not intend to follow through on. Such threats are considered intimidating and coercive and are prohibited by law. So if you’ve been informed you will sued for nonpayment, they better actually do it or they face penalties. If you’ve been intimidated in this way, contact either the Federal Trade Commission or your state Attorney General to file a complaint.

Proof of Debt

Upon request, collection agencies must provide written proof of your outstanding debt, including exactly how much and to whom. The time involved to produce a statement of your account can give you an opportunity to either come up with the necessary fund or reach a settlement. The collection agency has five day in which to provide you proof of liability and their authorization to collection on your debt.

If, once you receive proof of your debt, you think the facts are wrong, you must send the collection agency evidence of the error by certified mail within 30 days of its receipt. If you don’t dispute the facts at this time, the collection agency will assume the debt is valid and continue to pursue action against you.

One more option for postponement is available after you receive the validation notice. You have thirty days in which to request further written proof of any judgment on which the claim is based, as well as the name and address of the original creditor. Your attorney can help you navigate these options.

While the facts in your case are in dispute, the collection agency must postpone all debt collection activities until the information requested is received. Contact the proper authorities to complain about any violations. Don’t assume that just because the facts back you up that everything will resolve in your favor. Inaction on your part can result in a judgment against you.

Make Them Play Fair

Collection agencies are bound by certain federal rules when doing their job. If you find yourself on the receiving end of their collection activities and feel you are being mistreated, you should seek government intervention to hold them accountable. Such actions can stall the process long enough for you to work out an equitable arrangement with your creditor. Get all promises in writing, including a provision to strike all negative related items from your credit report and your debt is paid in full.

If you find yourself in a situation where you need to settle a debt with a collection agency, it’s important to know the rules. Understanding the process can save you a lot of hassle and possibly even save some money and help repair your credit.

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