This is NOT a site intended for legal advice in ANY WAY!! Please DO NOT utilize this as a primary nor secondary source for your credit and/or legal matters. As with any matter you are not sure of, seek PROPER legal advice!! Use of terms such as "YOU" and, or "DEBTOR" are not intended as a referrence to any person or persons reading this information, and makes no reference to any actual debt, claim, assessment, case, judgement or person. Any similarities are unintended. With that out of the way, ENJOY!!
This is the #1 Myth EVERYONE wonders/claims. This MAY OR MAY NOT be true. The key here is you are not a fortune teller. Whether you are a successful business owner or just from a wealthy background, The fact is you just don't know when credit will mean something in your life. If you are independently wealthy, credit can also factor into numerous aspects of business and successful transactions and intrest rates involved in many matters. No one knows When things will take a turn for the worse and credit, even if you're wealthy, is a good plan B at most.
Your sentiments here are as selfish as they can be, if you are married or someone has co-signed for whatever debt you have. Your creditor's have a right to pursue certain matters after your demise. Whoever you have assigned as the executer of your assets may have a lengthy problem handling your matters. In some cases, certain debts can become a loved ones responsibility!! Most creditors aren't so cold, but this is a possible outcome for some debts.
This is your RIGHT!!! You are in no way obligated to deal with the collections agency once your account has been assigned or sold. This is something you must decide in regards to how you manage your credit report. Actions that a collection agent takes against your account may have lasting effects on your credit and it's score. They are finding ways to contact you and prying into your life and business practices on a daily basis when they cannot contact you, or you are not proactive in regards to your account. This is a process called skip-tracing. These and other actions may have some adverse affects on your CBR (credit report). These actions generally will continue whether you have demanded to not be contacted, up to the point you have paid in full or the account is re-called by the client (original creditor).
Believe it or not, many people have told me this. Well, some were right and some were wrong. It depends on the debt, and the amount of time you have owed the debt. Some debt just isn't going anywhere, EVER. Don't be fooled into thinking the legal system leaves no option to your creditors. More often than not, while you are "slow-paying" or not paying at all, the creditor is taking action against your account whether you know it or not. If the creditor decides to take legal action, eventually you will be contacted by "someone" to serve you paperwork for this court matter. No response generally results in a default judgement against you if the creditor has the proper paper trail, noting efforts to collect the non-paid balance. Many of you have garnishments coming out of your check and don't even know it!!
This is the #1 rebuttal given to collections agents. This is true. You cannot actually draw blood from a turnip. However, the FTC (Federal Trade Commision) has allowed that a creditor may pursue certain debts once they can establish that a debtor has "gainful" employment, parameters which would vary per state laws. The probabilty of a creditor seeking a garnishment depends on the debt and state laws.
This is generally true - depending on the debt. By that 7 year time frame, be warned that various actions may have transpired that have cost you money. Also note, there are instances where your debt will NOT be taken off your credit report in the 7 year time frame. As well as actions against certain debts that go further than your credit report and actually effects your assets, such as a lien. Also, your intrest rates for some financed items can be effected.
Some debt is certainly considered under bankruptcy obviously. Then there is debt that just IS NOT GOING TO GO AWAY, PERIOD. Recent laws have adjusted what is considered under the bankruptcy laws.
This is your right, provided the original creditor has not sold the debt to a third party collections agency. Or have not set forth in their contract with the collections agency your account has been referred to, that you only deal with them. This may be the case, in which the original creditor may either only refer you back to the collection agency, or may accept your arrangement. Be pre-warned, in almost all cases, the arrangment you make with the creditor DOES NOT change the collections reprocussions you may have coming against you. Also, be aware that in most cases the original creditor is not obligated to you and your credit, and have no obligation to inform you if collection efforts are still effecting the account. If you choose to only work through the creditor, you need to inquire as to what effect your arrangement with them will have in regards to the collection status of the account. Many creditors will simply accept your payment and allow it to remain in collections, which permits the account to collect intrest and may still affect your credit report/score.
If your account is delinquent, and it is in your original contract that fees may apply if the account is ever considered either delinquent, or sent to collections, then the fees may either be negotiated by you or your lawyer with the collection agency. These fees, if they are noted in your original contract, are just as legal as the original debt amount.
In some cases , your debt HAS been sold to a third party agency. In other cases, your debt has only been assigned to the agency. In either case, it depends on the type of debt and the willingness of the creditor to settle on the account. In rare cases, the collection agency does have the power to settle the account, and if the agency HAS purchased the debt, then they have the right, but it is usually determined by upper managment if they will negotiate or not.
It usually is the end. But keep in mind, this is a pretty old debt if the collection agency or original creditor is willing to settle on the debt for a lower balance. Most debts and agencies will differ, but the general settlement amount sits between 95% and as low as 50%. Although you may get medical or minor luxury item debt collectors to accept as low as 30%. A forewarning, the fact that you did not pay in full if you settle a debt DOES leave the debt open to possible further collection efforts and possible charges. If an agency does settle your debt for less, the current owner of the debt has the right to either sell the remaining balance of your debt to another debt buyer for pennies on the dollar, or add the remaining portion to your credit report, in which case you may eventually have to pay the remaining balance anyway.
This is your right as well. As long as you know where your account stands, you are not obligated to speak with a collection agent. It isn't the recommended approach if you are "credit conscious", as the collection agents may be a hassle, but are calling to inform of your account status and the next intended action your creditor has suggested or taken. Generally, inactivity or slow/sporadic pay may accelerate collection activity on certain debts, after a certain time of attempting to contact you. The collection agent working your account is generally the decision maker on the smaller actions that starts the negative marks against your credit, such as requesting your credit report from the reporting agencies.
You have that right, if you can prove you account was reported in violation of the FAIR CREDIT REPORTING ACT. This requires documented proof. Collection agencies and creditors are scrutinized closely in regards to what is turned over to collections and proof of attempts made to collect your past due accounts, and are obligated by federal laws to document their process, as well as keep records of these actions for a cretain amount of time. They generally aren't going to risk their credentials to effect your credit report, if they cannot prove the validity of your debt. It is also a federal offense to threaten to report against a consumer if the agency or creditor does not actually intend to do so. Once either the collection agency, or creditor informs the debtor of the intent to report, they WILL and are obligated by federal law to do so.
THIS IS NOT NECESSARILY TRUE. While you do have the right to refuse to pay until you actually get the notice, it does not stop the collection efforts that are pending. There is the obligation of the collection agency to make sure that where ever your notice of debt was sent, that there was no mail return. Provided there is no mail return, the agency or client has no obligation to stop collection efforts. However, if there is proof of your notice having been returned, the agency or creditor is obligated to re-send the notice and refrain from collection efforts until the notice has had time to be received.
Once again, you're no fortune teller. Just because your credit is bad and you don't see any way out of debt, that doesn't make it reasonable to further affect it negatively. Unforseen occurrences happen to all of us. There are many situation where being proactive with your credit may be helpful.
This could be considered one of the BIGGEST scams ever invented. Not all consolidation agencies are bad, but for the most part, they are far from necessary! The consolidation company simply negotiates a lower price within your budget, they combine all of your bills in a budget. The money you pay to them, they in turn send minimal payments to your various creditors. The problem here, is most collection agencies DO NOT STOP COLLECTION EFFORTSor negotiate with Consolidation companies. Consolidating your debt DOES NOT stop legal ramifications of unpaid debt. A consolidation company that extends a loan that will cover your over all debt, is the only type of consolidation company that helps avoid bad credit and can stop collection efforts that may effect your credit.
You actually DO have the rigtht to demand this action. However, you must do it correctly. In order to have collection calls stopped, you must send a written request to "CEASE AND DESIST". This letter allows the collection agency to contact you one more time to inform you that your letter has been received and will be honored. Also that your letter does not stop other collection efforts that may be used. A "CEASE AND DESIST" is only for the purposes of ending calls and/or letters. The letter in no way excuses the debt and is not the same as a dispute letter. Although you may mention your dispute and it would normally be honored, seperate the two for keeping proper records. Most collection agencies will stop or minimize contact if you simply tell them to stop to avoid any legal implications, this isn't legally binding unless the letter is sent and received by the collection agency or creditor.
If you are still receiving calls after you have disputed a debt, your letter may have not been received. Maybe you sent your letter too late, it must be post marked within a thirty day period of the date showing you actually received your notice of debt. Possibly your dispute was considered and the original creditor denied your claim, the creditor has no real obligation to inform of a denial (that's the collection agencies job). More often than not, the collection agency has to receive the ok from the creditor on accounts if they are in a dispute status, before they stop collection efforts. So once they are calling again, or don't stop - it's probably been cleared for them to do so through the original creditor.
You just might need one. If this is an invalid debt, it is up to the collection agency to provide "PROOF OF VALIDITY OF DEBT". That generally means proof of your bill which isnt always just your original contract!! Be aware of circumstances that this may include. So many people rely on the idea that they don't have a signed or written original. An example of this is an "implied" contract, such as upgrading cell phone plans and maintaining monthly payments after the change.
This is your right. But be aware that your refusal to pay in full is not sufficient to stop collection efforts against your account. The proof has been sent to your last known address, thirty days prior to an agency even making a phone call to you, by federal law. If there is no mail return on the notice sent, the collection agency has the right to pursue the debt. BUT, the agency is bound by that same federal law to make sure that the notice HAS been sent within a thirty day period of receiving the account in collections. and must wait at least 5 TO 7 DAYS to ensure you have had time to actually receive the notice and respond to it. The collection agency must refrain from collection efforts until proper time has passed and no mail has been returned. But simply refusing to pay does not affect the process other than with in these standards.
This is a HUGE mistake many of us make!! Think of it this way, it's our credit and there is a time limit as to when a debt must be proven. This being the case, if a collection agency is calling you then their client (the original creditor) has exhausted efforts to collect the balance themselves. They have submitted the information to a collection agency, this is all the proof the original creditor must have, unless disputed properly. Via written and documented correspondence. A PHONE CALL WON'T WORK. You cannot dispute validity of a debt over the phone, period. So that shows the need for a consumer to have documentation. Not to mention, IT'S YOUR CREDIT, so it's YOUR RESPONSIBILITY to yourself to prove what you have paid. Treat your records and receipts like a business, Keep less important records for at least two years. More important, larger or more expensive items, keep records for up to five or more years. It may help you in the long run. But one thing for sure is that you don't just blow off the claim that you owe a debt. If you choose to, then be aware it's going to come back and haunt you. When it does, if you do not have the proper documentation and proof, you CAN BE HELD LIABLE FOR THE DEBT WHETHER YOU PAID IN FULL OR NOT. It is your obligation to disprove any false claims or force the original creditor to correct bad records. Otherwise the debt will fester and the usual one to pay for bad record keeping, is the consumer. Undisputed debts effect your credit scores and intrest rates. You've been warned!
This, believe it or not, is true in some cases. As a "Creditor", you want to be sure that a person has the "ability" to Honor their commitments. 'No' credit means "no proof" whatsoever. Most creditors will find safer to extend a line of credit to someone that has some blemishes on their report than it is to extend that line of credit to a person with no proven record at all. (This is the reason that co-signing is requested by some creditors). The credit report can and usually directly effects the intrest rates that a creditor will charge on their loan. This is one way of understanding why SOME bad credit is better than no credit at all.
Surprisingly, YES!!! Some will disagree, but to go into debt to purchase an asset, especially one that holds the potential to eventually pay for itself (ie, a nice home), then there is what one might call "GOOD DEBT". Obviously there is some gray area here, but just ask the likes of SPIKE LEE, good debt is plausible. If your take a line of credit with all intent and a well thought out plan to PAY IT BACK, then isn't that a positive? The issue isn't whether or not there actually is good debt, but how we individually budget and plan for the accepting and paying back of a loan. However, any debt you incur in lieu of purchasing an item that only has the potential to become a liability (ie, a car loan in most cases, as a car depreciates in value once you have left the car lot), is what most should concider a bad debt. Circumstances will vary, obviously.
This could be the end result of a creditor or collection agency pursuing a debt that is not valid, or pursuing it improperly. Breaking the Fair Debt Collections Practices Act, or the debt is deemed as invalid, is about the only way you can get the creditor or a collection agency to pay you back for time it may take to provide your proof. Even then, you must either take the matter to small claims court, or file a complaint that is found in your favor.
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