Brent's Credit and Debt blog

Finally, I got smart. There is a law, Called the Fair Debt Collection Practices Act, or FDCPA, that regulates how debt collectors are allowed to contact you, including how often, where they can call, and what they can say.

They are easy to hate, aren’t they?

They call you and demand money for something you couldn’t pay for in the first place. They try to help you ‘find’ money by taking out additional loans, or by borrowing from family. They want you to make payments. They are even willing to waive the interest they charged you.

The debt collector can get a lot of information about you. However, do they have the right to see your bank records?

Well, it happened. You didn’t make your payments, and now your account is going to collections. I know how you feel. You get a sinking feeling in your gut, you know this is going to make getting credit really tough, and you start to worry about getting sued.

Getting sued is a terrible thing. The prospect of having to go to court, the possibility of a judgment on your credit report, and having to meet a debt collector face to face fills most people with dread. Unfortunately, once that suit is filed, there is very little you can do to get out of going to court.

When you file bankruptcy, you are, by law, going to get relief from creditors. Now that you have filed, however, the collectors just keep on coming after you. Are they allowed to do that?

The short answer is no. They can’t try to collect on that debt.

You have an account at collections. Face it, you have a problem to deal with. The stress is just about unbearable, and the fact is that you are legally responsible for the money. The fact is that your account has been sold, and you now have to deal with the repercussions of not paying for the debt on time.
When a collection agency receives your debt, they have a couple of courses of action that they can take. The first, as you know, is to start calling you and try to collect. That is the most common method of getting money from a debtor on a defaulted account. The collection agency has another option, though. They can choose to sue you for the money.

So, you’ve missed a payment or two. You probably could have made them, but other things, like eating, got in the way. Now your creditor is calling, writing, emailing, and generally acting like you are a bad person. You don’t want this to go to collection, and you don’t want to lose the ability to use the card. So, how long do you have before the creditor writes you off?

You aren’t going to believe this, but it’s true. Here is the secret behind debt collection: creditors want their money! OK, I am being kind of irritating there, but that is what drives debt collection. How the process works, however, is pretty interesting.When you apply for debt, the creditor decides if you are credit worthy. They do this based on your income, your past payment history, your line of credit to used credit ratio, and your credit scores. It takes a computer about 1 second to make this decision.

The game has changed. There is old debt out there worth tens of billions of dollars that was believed to be un-collectable. In other words, the utility company didn’t know how to find you, so they never pursued the debt. This debt is very cheap to buy, and the fact is that a very small number of collections against it can generate large rewards for the collection agency, so they are willing to put in the time and effort to try to get a bbit of cash out of you.