Stop Debt Collectors from Harassing You
First and foremost! I would never talk to a debt collector over the phone. Your “Rights” are never served over the phone. I used to tell them, “Send it in writing!” and then I would hang up. If you allow them to talk to you, many of the third party debt collection companies use scare tactics and make false statements to scare you into making a deal and paying them. Some of the lies they will tell you are:
– We’re going to send the Sheriff to get you. You can be arrested.
– We can come and get your belongings, your home or your bank account.
– §We’re calling because you owe a debt. You know it and we don’t have to prove anything.
– We’re going to call your employer and garnish your wages.
– You have committed a crime by not paying this debt.
None of that is true. They just want you to admit that you owe a debt. They like it even better if you make a deal to pay them a little money. Then you’re really hooked; you just made a new contract with them. I would never talk to anyone over the phone. If its not in writing, it didn’t happen.
You can see other violations in the Fair Debt Collections Practices Act. This is a Federal law and you can sue the third party debt collectors if they violate your rights in this law. This law is not intended for use with original creditors like the banks. Those companies are the original creditors. This law was created to prevent third party debt collection abuse.
See the law here: Fair Debt Collections Practices Act
What is a 3rd Party Debt Collector?
Third part debt collectors have merely purchased an alleged debt from your original creditor or from a clearing house. Sometimes these alleged debts are purchased in bundles. The bad news is that these debt collection companies, who prey on the uninformed, purchase these alleged debts for only “Pennies on the Dollar” and sometimes even less that a penny.
So for example, if you defaulted on a credit card account for $5,000, that debt collection company may have only paid $100 or $200 for it. Then they start calling you and harassing you to pay the full $5,000 plus interest. Does that sound fair?
Someone asked if you can contact the original bank to try and negotiate the original debt. Most times once an alleged debt has been sent off to a collection agency, the original creditor will have nothing more to do with that debt. This is why we call them third party debt collectors.
Never Speak to a Debt Collector on the Phone
None of that is true. They just want you to admit that you owe a debt. They like it even better if you make a deal to pay them a little money. Then you’re really hooked. AND the statute of limitations clock starts all over again. I would never talk to anyone over the phone. If it’s not in writing, it didn’t happen.
You can see other violations in the Fair Debt Collections Practices Act. This is a Federal law and you can sue the third party debt collectors if they violate your rights in this law. This law is not intended for use with banks, credit card companies, auto loans, etc. Those companies are the original creditors. This law was created to prevent third party debt collection abuse.
But Still, Can They Sue Me?
Yes they can, but that does not mean that they can win. They don’t have the proof. If they were to win and get a judgment against a consumer, they could garnish wages or in some states take some belongings. But again, they would have to win. If a consumer does nothing to rebut the complaint, the collector will surely win.
Consumers have rights and the Fair Debt Collection Practices Act spells out these rights. Can the collector really validate the alleged debt? Short answer: NO.
Bob’s Bad Scenario
If Bob lives in Florida there is a four year statute of limitations on an open-ended accounts or credit card debts. If Bob defaulted on a credit card debt by making his last payment in March 30, 2002 the bank would likely have written it off by the end of September 2002. That debt would be dead by April 2006. A bank compliance officer that worked with us told me that after the bank writes it off, it gets sold out to the third party debt collectors.
In this scenario, Bob gets a call from a third party debt collector company that had purchased this alleged debt in 2009 (three years after the limit). If that company called Bob on the phone and threatened him, they would not really have any teeth, just bluster. BUT, if Bob didn’t know the Fair Debt Collections Practices Act, a U.S. Law, and paid them a small amount, he just made a new contract with them. Then he’s bound by that contract all over again. It’s a whole new valid debt. They could even sue him in court. The debt collection company made an offer and Bob secured the contract with a small payment. That never had to happen.
Send Validation Demand Letters Certified
When a consumer sends any correspondence to a debt collector or law firm it is a must that the letter be sent “Certified” with a return receipt request attached. The post office can provide the two small forms needed. The reason for this is to prevent a debt collector from saying that they did not receive the debt validation letter.
What is Zombie Debt?
Many collectors buy debts that are old and try to trick consumers into paying them. Each state has statute that states a time limit on certain types of debts. In other words, debts has an expiration date. For instant in Colorado after three (3) years from the time of the last payment, a debt collector cannot sue for an alleged debt. That doesn’t mean they can’t try.
That doesn’t keep the third party debt collectors from buying and trying to collect on old debts. They are hoping that the consumer doesn’t know the statutes and the FDCPA law. Consumers have busy lives and normally don’t study this subject.
You can check your states statute of limitations on debt at: http://PersonalTouchCreditCounselors.com/statute-of-limitations
Why I don’t like debt settlement companies
Debt settlement companies probably don’t want you to know about this. I contacted a debt settlement company that was advertising on the internet. I won’t mention any names, but I’ll call this company “ABC company”. The man I spoke with said that they could reduce my credit cart debt by about 50%. When they added their fee on top of the 50%, it turned into about 65% to 70%. Then I found out that their fee would be paid before they would being paying my so-called creditors.
If it was going to take almost a year to pay their fee before they started paying the creditors. The BIG PROBLEM with this, I’m told, is that many banks write off an account if they can’t collect on it within 180 days (six months). A bank compliance officer told me that if the bank writes off an account, they sell it off to third party debt collectors or to a debt clearing house.
If the debt settlement company (ABC Company) isn’t paying the original bank until after their fee was paid, they would start paying a third party debt collector. In my way of thinking, if I don’t have a contract with a third party debt collector, then I don’t own them the full amount of the alleged debt! I suppose that “ABC Company” would negotiate the amount down some.
Remember that the third party debt collectors only paid pennies on the dollar for these alleged debts. Then they want a consumer to pay the whole original amount plus interest. I don’t know about you, but I don’t think that’s fair.
The same goes for debt consolidation companies.
Why I Would Never Borrow Against My Home To Pay Off Debt
You home is one of your most important assets. If I were to borrow against my home and something terrible happened and I couldn’t pay my debts, I would lose my home. Many states have homestead laws that protect your home against debt collection.
Bankruptcy is Not a Good Answer
A bankruptcy can stay on your credit report for seven to ten years (dependent on the type of bankruptcy and state obtained). It can make it very difficult to obtain future credit, buy a home or car and sometimes even get a job. Almost every creditor, lender, and employer asks if you have ever filed bankruptcy. Due to the severity of this option it should always be considered as a last resort. https://en.wikipedia.org/wiki/Bankruptcy_in_the_United_States
Fascinating Information Below
“The Money Masters” is a brilliant video about the how money was created and how the Federal Reserve works. Don’t miss this fascinating and historical documentary. http://www.themoneymasters.com/the-money-masters/
“The Creature from Jekyll Island, A Second Look at The Federal Reserve” Audio CD: “An Address by G. Edward Griffin. Here is a close look at the Money Magicians’ mirrors and smoke machines, the pulleys, cogs, and wheels that create the grand illusion called money. Based on Mr. Griffin’s book of the same title”. https://realityzone.com/product/creature-from-jekyll-island-lecture-1-cd/
“Two Faces of Debt” is a booklet in the fifth revision of “Debt – Jekyll and Hyde” originally published by the Federal Reserve Bank of Chicago in the November 1953 issue of its monthly review. https://www.scribd.com/document/192190186/Federal-Reserve-Bank-Two-Faces-of-Debt
Your real estate agent says that to finance a home loan you can expect to give at least a 20 percent down payment. You tell your wife what you’ve been told on the phone, and she is ecstatic that you will be able to afford the home of her dreams. Everything seems fine until your real estate agent tells you that to make your monthly payments cheaper, you are going to have to give up on the idea of making a 20 percent down payment.
Usually a mortgage lender will use your FICO score to decide credit worthiness. The FICO Score ranges from 300-850. You will need to have a score of 620 or higher. For an FHA loan the minimum FICO score required is 580, but you would probably want a higher score for a better interest rate.
Moreover, in the M2C method, if the check for compliance is deficient or delayed or refused or elsewise questionable in any manner, we contest the accusing parties with a lawfully leveraged challenge to demonstrate the certification of factual reporting (the process as well as the item itself of reporting) which includes the mandatorily perfect and complete metro 2 formatted reporting standards, the applicable requisites of the Fair Credit Reporting Act and the applicable requisites of the Fair Debt Collections Practices Act, and or any standard or regulation otherwise, be it mentioned or not. 
