How To Deal With A Third Party Collection Agency Harassment (DIY)

In the perfect world, Collection Agency Harassment (original creditor or third party) would rather collect in full and not less than that. But in the real world, settling that debt for a lot less than the full amount, is possible and what the consumer can afford, and should avail of.

HOW TO DEAL WITH A THIRD PARTY COLLECTION AGENCY

After you have defaulted on your account, you’ll start getting cyclical collection calls, reminding you to pay. At first, they would be nice, but later on, if you still have not responded favorably, expect to get threats of a legal action-but do not panic and commit to anything. You’re probably wondering what the worst case scenario is-if you can go to jail for not being able to pay-and the answer is, no. Jail and prison are for criminal cases.

Five to six months after you have stopped paying your original creditors, two things can happen. They’d either sue you or pass the account on to a third party collection agency. Writing off your debt as as a loss (bad debt) is mandated by the IRS. The creditors losses profit but they get a tax break. But banking is a business, and so they would want to get at least a portion of that written off debt, by passing the account on to a third party collection agency-where the value of your debt, understandably, is diminished-therefore, can be settled for less than the full amount.

WHAT’S IN IT FOR THE THIRD PARTY COLLECTION AGENCY?

Third party collectors make their money by purchasing your debt for a percentage of what it’s worth, but of course they’d want to get more money, by putting as much pressure on you as legally possible. Be warned that they’d try anything if you let them. They would attempt to harass you via the phone, they might try your relatives, or even your work place. But those are prohibited so know your rights under the Federal Trade Commission – Fair Debt Collection Practices Act (FDCPA).

WHAT TO DO WHEN CONTACTED BY A COLLECTOR

-Don’t avoid the calls. Talk to the collector and find out if the debt is really yours, how much you owe, and to whom (name of the creditor).
-Document all interactions you have with the agency.
-Get the name of the person who contacted you, what agency they work for, their address, and phone number.
-Ask the collector for a verification letter to determine if the debt is really yours.
-If you want them to stop calling you, send the agency a certified letter asking them to stop and to contact you (cease and desist letter).
-If the debt is really yours (validated), try to negotiate the amount that you can realistically afford to pay each month, and pay on time.
-Make sure to have in writing, and signed by the authorized personnel, all the things that were agreed upon. You are doing this for documentation, for when or if a legal complication arise.

The Collection Agency Do’s

-The collection agency must send you a “Validation Letter” explaining what. You owe and to whom within five days of contacting you.
-if you have hired an attorney, the collection agency should only be. Communicating with your attorney and not you.
-They can sue you for the debt that is owed and then garnish your wages if they win the lawsuit against you.
The Collection Agency No No’s
-The debt collectors are not supposed to contact you before 8 in the morning or after 9 at night.
-The debt collectors are not supposed to contact you at work; you can inform them either verbally or in writing that you are not to be contacted there.
-The collection agency cannot discuss with anyone except you, your spouse, or your attorney any information about your debt.
-Collectors may not harass or threaten you.
-Collectors may not make any false statements about you to anyone about your debt or to you
-Collectors may not make any false statements about who they are.
-Collectors may not engage in any unfair practices such as. Trying to collect extra fees or taking money out of your account without authorization.