Collection Calls are always a nuisance, but they are even more annoying when they involve a debt that is too old to be collected through a lawsuit. These old debts are the ones where the statute of limitations has long since passed, making them “stale debts” as the biz refers to them. Such debt is big business for the debt collectors however, as they are purchased for pennies on the dollar from the creditor who has already written the off the debt. And it is sold super cheap because the party buying the debt knows that collecting it must be done by means other than filing suit, usually involving some type of harassment or deception towards the consumer. These debts are in large part virtually worthless but the prospect of receiving payment can mean huge returns for the collector. Greater risk means greater returns. For example, if the account totals $5,000, the collector may buy a stale debt for $20 and if it collects even a part of the total owed, can make extreme profits.
Once the collector purchases a debt, it will proceed to contact the debtor – even though that person can no longer be legally forced to pay if the statute of limitations has passed and it is raised as ad defense.. Collection calls and emails then come pouring in as the collector tries anything that will work ,to get the consumer to agree to pay something, then ratchet up the demands to push for as much as can be obtained. If the consumer makes payments, whatever is received is found money because there is no way, other than empty threats and harassment, to force payment. Even the smallest payment results in substantial profit for the debt collector when the debt is stale.
The Fair Debt Collection Practices Act protects consumers who have been harassed or deceived into paying stale debts. An important thing to remember however is that the consumer must not give in to threats and must know how to assert the statute of limitations as a defense. The best way to start is with a cease and desist letter sent to the collector by certified mail, retaining copies for record-keeping purposes. Such a letter forces the collector to quit harassing you and if they fail to do so, a violation of the FDCPA results.
Want to know more? Call us today for advice on how to deal with collection agencies that won’t play by the rules regarding your debts.
Debt Collectors can be nasty and have earned their reputation for not being easy to deal with. It is easier it seems to avoid them altogether, hoping that the problem will go away on its own. Unfortunately, collection agencies have a hard time giving up. They know they are supposed to work within the rules set forth in the FDCPA and yet they often continue to violate them one way or another. They know that a debt collector can do more to make life difficult and aggravating for consumers when it comes to student loans, than other collections, and can take a judgment against you without even filing a complaint. Federal loans also carry with them the opportunity for debt collectors to have employment wages garnished or have a tax refund paid to the lender directly.
If you have a Federally sponsored student loan and cannot pay, and wish to avoid debt collectors, either write a letter demanding the collector to cease contact; or, ask in writing for a deferment on your loan; or better yet, negotiate the balance, perhaps through an attorney (not a “debt settlement company”). Because student loans are different types of debt than typical consumer purchases, debt collectors are often instructed by the lender to agree to deferments or in some cases a reduction of the entire amount, payable over time. Whether it is because of a difficult economy, finding and keeping a job, a disability, care for a family member, personal illness or military service, these options can be very helpful and make things easier for you to handle.
1. Stop the Collection Calls: Instruct the debt collector to stop calling you at home or at work. Write them a letter if you can with those instructions and save a copy. If the calls continue, they have violated the Fair Debt Collection Practices Act by harassment. Stopping the calls requires the collector to resort to letters that state the nature of the debt and what is sought. You can take the time to research all the facts to determine if you in fact owe the money or not, and whether you need to consult with others before responding. You are not put on the spot by unexpected calls from rude debt collectors who may make you upset, aggravated or otherwise uncomfortable in your own home or at work.
2. Know the Statute of Limitations: Each state has a term of years, referred to as a statute of limitations, within which the debt collector must file suit or lose the right to do so. Once expired, you may be sued but you not forced to pay if you raise the statute of limitations as a defense. Debt collectors routinely sue on old debt in hopes that the consumer will not know how to respond, however a law suit that seeks payment for a stale debt violates the Fair Debt Collection Practices Act.
3. Keep Records of All Contacts With All Debt Collectors: Save “throw away” letters seeking payment or communications from a debt collector. Keep a log of calls, date, time, originating phone number and caller. If you have an agreement or sent a letter, retain copies. Keep these in a safe place. Often what is resolved or dealt with on one day, can reappear later without any acknowledgment by the collector of the prior events. And debts are routinely rotated between several debt collection agencies, usually without any communication between them regarding your account. Perhaps most importantly, debt collectors benefit by the absence of keeping records, calling and writing over and over again if it will lead to more money being paid. Track your accounts, know your history with debt collectors and don’t trust your memory alone.
Debt Collectors May Not:
communicate before 8:00 a.m. and after 9:00 p.m. local time
communicate with consumers at their place of employment after having been advised that the employer does not permit such calls
misrepresent its identity as a debt collector
publish the consumer’s name or address
engage in communication with third parties except to obtain the current address or phone number of a debtor
threaten to or actually report false credit report information
What is CreditLaw.com? We are lawyers who stop abuse by debt collectors in their tracks. A service of Kimmel & Silverman, PC, helping over 50,000 consumers since 1991.
After Mr. McLeod fell behind on his mortgage payments, the frequent and harassing calls from a debt collector caused a Tampa man’s blood pressure and stress levels to rise to unhealthy levels. His wife is claiming that the abusive debt collection calls contributed to his death after her husband had a massive heart attack and had to quit his job for health reasons. She claims the debt collection company called 10-12 calls a day. Read the full story here:
Debt Collection Calls are never a pleasant experience but chances are, there is a reason you are being contacted. The first thing you want to do is take control of the call. Do this by asking questions. What is the company name? Where are they located? Tell me more about my debt history? Take notes and make it obvious that you are taking notes. Ask them their name. What company do they work for? All of these questions will most likely throw the collection caller off their script and put you in control so that you can find the time to sort yourself out. This is also the time when debt collectors will get flustered and move to violate your rights so it’s important that you know what those rights are. Review the full Fair Debt Collection Practices Act and if that’s too much, check our Stop Debt Harassment summary which should offer a snapshot of key points to take away from a collection call. Debt Collectors should not be:
# Misrepresenting the debt or
# Claiming that he or she is an attorney or law enforcement officer
# Publishing the consumer’s name or address on a “bad debt” list
# Seeking unjustified amounts not permitted under an applicable contract and law
If the debt collector has violated your rights, the opportunity exists to do something about it.
