How To Deal With Debt Collectors And Re-Aging Collections
Posted by: Guest Author / Category: Personal FinanceOne of the most common questions that I receive from people struggling with their household finances is, How do I stop collection agencies from harassing me? Many of the people asking me about the harassment they are enduring from debt collectors come from divorced individuals. I recently got an email from a divorced lady whose ex-husband had quit paying the bills he agreed to pay in their divorce decree. Her situation is not unique.
The story often goes like this: Girl marries boy. Girl and boy divorce. Boy hates girl. Boy vows to make girl’s life miserable. Boy fraudulently obtains multiple joint accounts with Girl’s information. Boy wracks up an ungodly debt and drops off the face of the earth. Girl is stuck holding the bag.
This story works both ways, with either partner playing the vindictive role. Unpaid bills, which had been agreed upon in the divorce settlement. Abused joint accounts. It is a nasty reality. Two things are certain. The injured party is always blindsided with a terrible beating to their credit, and the injured party expends incredible amounts of money and energy to right the wrong. It’s not fair, but it is reality.
Five years ago, this lady’s husband intentionally opened accounts in her name, with her information. He then charged these accounts up and skipped town. His act of malice left her very surprised when the collection agencies started calling. After much fighting, and refusing to pay, the debt collectors eventually quit calling. Now, over five years have passed, and this lady is again receiving phone calls informing her that she owes nearly $7,500 plus interest, plus late fees. Deja Vu. The very same resolved debts were back on her credit report.
I was truly empathetic. The lady had moved on with her life, remarried, and put her ex-husband in the past. So she thought. Her questions to me were, “How do I make these collection efforts stop?” and, “How can the collection companies legally pursue me for this debt?”
If you allegedly owe money to a creditor, they may pursue you until they tire of the chase. When this happens, they often sell the rights to collect that debt to a collection agency. While there are state statutes on how long you may be pursued, the start date is based upon when the collection agency purchased your account. To avoid the account exceeding state statutes, collection agencies routinely buy and sell accounts amongst themselves. This process is known as re-aging debt, and can continue indefinitely.
Combating this assault by debt collectors can be a daunting task. It requires a great deal of effort, and can repeatedly return to haunt you in the future. How do you stop the efforts of collection agencies?
Don’t waste your time putting a comment on your credit report. Lenders don’t read them, and even acknowledging a supposed debt has the potential to hinder your efforts to remve collection efforts. When fighting collection efforts, acknowledging the debt can work against you. Besides, how well can you dispute a negative on your credit report in 100 words or less?
Don’t fear disputing an account in collections, but use your head. You have a right to insist that the collection agency prove that you are responsible for the debt they are trying to collect. If they cannot provide documentation, you are not legally responsible to pay it off. Since debt collection agencies are constantly buying and selling accounts, the paperwork often gets lost in the shuffle. If you know your rights, and proper dispute process, you can normally stop the collectors in their tracks.
Check your state laws. Collection agencies are often contemptuous of the statute of limitations on debt collection, unless you are knowledgeable enough to threaten them with your knowledge of their violation.
Don’t be afraid to issue a “cease & desist” letter. There are numerous state and Federal laws that protect consumers from harassing collection efforts. You may issue a “cease & desist.” Once issued, they may no longer call or contact you about the debt, other than to acknowledge reciept of your letter and their intended actions in response.
Settle the account. This is an option of last resort. If you’ve been worn down, and want the collectors to go away- offer to settle for 10 cents on the dollar, in exchange for having the “negative” permanently deleted from your credit record. Get it in writing, before you send a penny. Don’t trust them, based upon a conversation. Collection agencies are notoriously underhanded, and will say anything to get money out of you.
If you find yourself overwhelmed by the efforts of debt collectors, don’t be afraid to stand up for yourself. They can wreak havoc on your credit, but you can repair that damage. Don’t get frustrated, get help. Often, one of the most helpful steps you can take to restore your credit and stop the collections is to find a reputable credit repair agency to help you. Some of them specialize in disputing debt collections. One that has come to my attention more than once is Over720.com. They have a reputation for aggressively confronting collection agencies. They are actually so confident of their efforts, that if your debt ever reappears on your credit report, they will fight that collection effort for free. Not many credit restoration companies stand behind their efforts with that sort of confidence.
Decide how you are going to resolve your collection issues, and then act. In today’s economy, your credit score is too important to be damaged by a collection agency. Be tough, and you can resolve those issues.
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Tags: bill collections, bill collector harassment, bills, collection agencies, debt collection, debt collections, debt relief, divorce, money, Personal Finance, re-aging accounts