You are in arrears with a credit card or other unsecured loan (a loan for which there is no collateral such as a car, boat or house). And the first call from a debt collector has come to you. What is your next step? Can they take you to jail? Can they sue you? Can you threaten to call your boss and have you fired?
Since I had 12 credit cards and a personal loan in crime in 1998 and 1999, I know what you’re going through. The fear of the unknown is probably very big for you right now. Get some rest! I will explain what can and can not happen to you.
1. You will not go to jail because you have not paid your loan.
The police will not show up at your door with handcuffs. We do not have a debtor prison in the US. In fact, it violates the FDCPA (Fair Debt Collection Practices Act) if someone threatens you with arrest!
Second The debt is usually only sold to a collection agency if you are six months late.
Your creditor is hoping for a payment from you. But after 180 days he has to clean up his books. So he will transfer or sell your debt to a collection agency. This is called a charge. This does not mean that your debts have been paid off! It is an accounting term; Your debts will continue to exist.
Third You can control the collector’s calls to you.
Collectors can contact you only at reasonable times, usually between 8am and 9pm. If you no longer want to be called, either at work or at home, or both, you will need to get the collection agency’s mailing address and send a notification to end the call. WRITTEN. Some collection staff are good at writing notes in your file to end the call, but many are not good at it. I recommend that you send this certificate with a proof of mail if you continue to be called. In this way, you have the evidence that you threaten them with legal action for violating the FDCPA.
4th You can control the mailings of the collector to you.
Same as the calls. If you send them a written message not to contact you by mail, they must stop. However, they can legally send you two more notifications. First, they have received your message and will end the contact with you. Second, they are against you, for example, because of a lawsuit. Everything else will stop.
5th You will contact your relatives, employers and possibly friends.
Generally only if they can not find you. This is called skip tracing. Legally, the collector can only discuss the debt with you, so he uses phrases like “It’s very important that I speak with ____” or “Please call me as soon as possible.” They will try to get your phone number or address.
Her relatives and friends can tell the collector not to call her anymore.
If your employer does not want you to be interrupted by phone during the service, the collector should stop talking on the phone. Which makes sense, because the collector has no chance to get money from you when you get fired!
6th The collector can not threaten to sue you.
The keyword here is “threatening”. If the collector has started with the legal documentation to bring you to justice, he can tell you that because it is a fact, not a threat. If you receive this call or letter, take it very seriously.
7th If the collector wins in court, he will get a verdict against you.
The verdict is what allows a collector to legally decorate your wages, decorate your bank account, mortgage your house and even sell your car to collect the debt. He can not collect social security benefits, retirement accounts, invalidity benefits, etc.
A collector will not normally spend the money to bring you to justice if you have no assets to get to. This is called judgment-proof. So if you are unemployed and have little fortune, the judgment is just bark and not a bite.
Hopefully this will alleviate the fear of the unknown for you. So if a collector calls, should he stop? Do you want to negotiate the debt with him? Do you consider yourself to be judgmental so that the debt never goes down? You know what can and can not happen to you if you do not settle or pay off your debts. Sleep well tonight!