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What a Debt Collector May be Hiding from You

On Behalf of | Mar 27, 2015 | Consumer Protection

When it comes to debt collection, most consumers are aware that once the constant phone calls and letters start coming, it is not the original creditor attempting to collect on your debt.  When you fail to make payment on your debt for an extended period of time, companies usually send the debt to a collection agency to collect for them or even sell the debt to the highest bidder.  Collection agencies often purchase debts for pennies on the dollar with the hope that they will make money when they collect the debt for much more than they purchased it for.

Collection agencies that purchase debts only make money when you pay up, so more often than not, their collection tactics can cross the line.  In 2014, the Consumer Financial Protection Bureau (“CFPB”), the agency in charge of financial affairs, reported receiving around 40,000 complaints about collection agencies.  The following is a list of what debt collectors don’t want you to know and are more than likely hiding from you.

First and foremost, even after you pay off a debt it won’t be wiped off your credit report.  Don’t fall prey to a debt collector telling you to pay up to repair your credit.  While your credit will improve and reflect the account as paid or settled, the debt will still appear on your report and reflect negatively on your credit score.

Second, despite what a collector threatens, if you don’t make payment you cannot always be sued for the debt.  There is a statute of limitations on every debt depending on the type of debt and the state in which you reside which determines the length of time a debt collector can file suit against you to receive payment.  After the statute of limitations has passed, you can no longer be sued for the debt.  Along the same lines, a debt cannot be reported to the credit bureaus forever, after a period of seven years, the debt can no longer be reported on your credit file.

Third, your debt may have been sold to a new collection agency, so make sure you keep good records of payment.  You don’t want to fall prey to a collector attempting to receive payment on a debt you already paid.  Furthermore, if you settle a debt, pay off a debt for less than the full balance, make sure you get a letter from the collection agency that the debt is considered settled in full.  You don’t want a new collection agency coming after you for the balance of the debt.

Lastly, if a collector violates the Fair Debt Collection Practices Act (“FDCPA”) you can do something about it.  Debtors have rights!  The FDCPA was enacted to protect consumers from collectors who take advantage and violate the law.

If you believe a collector has violated the FDCPA, contact SmithMarco, P.C. for a completely free case review.