How to Fight Debt Collectors and Win

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debt collectorIf you’re currently being harassed by arrogant and obnoxious debt collectors, then you need to keep reading so that you can protect yourself and avoid becoming a victim. In this article, you’ll learn how to fight debt collectors and win.

You’ll get the scoop on how they operate, the law that governs them, how they find you, how to get them to stop calling you, and the legal actions they can take against you.

Armed with this knowledge, you’ll have unruly debt collector bullies scurrying back into their dark holes, and picking on some other unsuspecting soul.

How Debt Collectors Work

Debt collectors and debt collection agencies generally operate in one of two ways. First, if you start missing lots of payments on a debt you owe, the creditor will eventually turn your account over to a debt collector. The collector will then take on the task of trying to get money from you.

Under this scenario, the debt collector will be compensated based on how much of the owed money they can collect from you. They can earn as much as 10% to 50% of the amount they collect.

The second way that debt collectors operate is that they will buy old uncollected debts from a creditor at a discount. Under this approach, any and all money the debt collector is able to squeeze out of you they get to keep.

So you can understand why your phone will begin ringing off the hook like there’s no tomorrow. Some debt collectors will be aggressive and disrespectful with you right from the start. They might call you a deadbeat, loser, or other insulting name.

On the other hand, you might be contacted by a debt collection agency that is initially pleasant. But they will become more demanding if you don’t pay up.

The reason that debt collectors and debt collection agencies operate like this is because their mission is to collect as much money as they can as quickly as humanly possible. They know that time is of the essence. Through their statistics and experience, they know that the longer a debt remains outstanding, the less likely any money will be collected.

But debt collectors don’t get to run amuck. There are laws that protect your rights and that they are required to follow .

What Are the Laws for Debt Collectors?

The Fair Debt Collection Practices Act (FDCPA) is the law that governs what debt collectors can and can’t do to collect unpaid consumer debt. They can collect on items such as credit card debt, unpaid mortgages, past-due auto loans, past-due utility bills, and more. You can read the full Fair Debt Collection Practices Act here.

Now, you should be aware that while this law law must be followed by independent debt collectors and debt collection agencies, it does not apply to the creditor’s own in-house employees. They can still contact you and demand payment without any of the penalties that the FDCPA would impose.

Some of the specific areas that the FDCPA covers and provides guidance to you and debt collectors include:

– Methods of communication
– Harassment and abuse
– Unfair practices
– Legal actions they can take
– Civil liability penalties they could face

How Do Debt Collectors Find You?

You may not believe it, but you’re not as hard to find as you might think. The most obvious way that debt collectors find people is from the creditors. Remember that when you apply for a loan or credit card, you give the creditor all sorts of information about you. They know your address, phone number, and more. Plus they can look into your credit files on hand with the major credit bureaus at any time.

So, the creditor can pass along basic contact information about you to the debt collector. In addition, if you’re on Facebook or have any social media profiles, it won’t take much effort to find you. If you don’t believe me, perform a search for yourself online. Enter your home address and see what comes up.

Now, you might be one of those people who swears you don’t have a footprint online. Okay, I’ll take your word for it. But even for difficult cases, if the past due amount is large enough, a debt collector could hire a private investigator. And did you know that your state government makes money by selling certain personal information it has on file about you to other organizations?

How to Get Debt Collectors to Stop Calling You

When a debt collector contacts you, it’s usually not a pleasant experience. On top of that, the phone calls can come fast and furious, and relentlessly day after day. It’s enough to drive you crazy, but that’s their goal. They’re counting on you getting fed up with the harassment and paying off the debt.

What can you do when there is no money to pay the past-due bill and some whack job keeps annoying you about it? Well according to section 805 of the FDCPA law that we just covered, you can “STOP” harassing calls by notifying the debt collector in writing that you no longer wish to communicate with them.

So get their personal name, and their company’s name and address. Then send them a letter indicating that you wish to cease all communication with them. I suppose you could use email, but I would suggest mailing the letter with return receipt confirmation. This way you’ll have a paper trail. The only contact that the debt collector can have with you upon receiving the letter is to let you know their next steps, such as to sue you or whatever.

Now, if the debt collector ignores your request to cease communications, then you should tell them that you’re going to contact the Federal Trade Commission and consumer protection office of your state’s attorney general and file a complaint. If the threat doesn’t work, file a written complaint.

An idiotic debt collector may not stop calling despite your threat. But by documenting the complaint, you now have evidence of a blatant violation of the law in the event you decide to sue them for money. Keep a journal of all the calls you receive from them and what was said.

What Legal Action Can Debt Collectors Take?

The specific legal action that a debt collector can take against you will depend on the type of debt you have. For example, credit card debt and unpaid utility bills are considered to be “unsecured” debt. This means that there is no asset behind it. So in order for the debt collector to get any money, they’ll have to sue you in court. If this happens, you should hire a consumer law attorney.

When you go to court, if the judge rules against you and finds that you do indeed owe money, there are a variety of remedies. Your wages could be garnished, some other asset could be taken from you, or there could be a lien placed against an asset.

Now, the opposite of an unsecured debt is a “secured” debt. These type of debts have assets behind them. Examples include home mortgages and auto loans. Should you fail to pay these debts, your home or car could be taken from you.

So now you have the big picture on how to fight debt collectors and win. You know how they work, and the secret source for keeping them in check. Knowing their game and your rights under the law will put you in a position of strength. That’s what being a successful wealth ninja is all about.

Wise Ninja Action Item:

– Review the Fair Debt Collection Practices Act (FDCPA)