Debt Repair and Credit Repair Tips

This is the first article in a three part series on the very basics of debt collection. When you take out an account, and don’t pay your account bills on time, the account goes delinquent and your bills turn into debt. A debt collector is a person whose job it is to try and get in contact with you and retrieve that money, or in other words, collect the debt.

Debt collectors can also be called bill collectors, account collectors, or collection agents. A lot of debt collectors work for third party collection companies. A creditor is the financial institute that you originally set up your account with. For example, you set up an account with a contractor to do work on your house. When you do not pay your bills, this creditor will usually hire outside of their company to get their money collected, specifically if their accounts receivable department is small.

Other collectors work straight for the original creditors. These people are called in house collectors. Generally companies with in house collectors are finance based institutions like health care providers, utility companies, or credit card and mortgage companies. In house collectors are working straight for the creditors, while third party collectors are working for their own collection agency, so both sets of collectors must follow different guidelines and regulations when it comes to collecting debt and directing payment.

If you are being contacted by a debt collector, try to determine if they are calling on behalf of the original creditor or a third party debt collection agency so you have a better idea how to proceed. If you are being contacted by a third party debt collection company for example, you are usually going to be told to pay the agency, not the creditor.

In house collectors do not always have to adhere to all of the rules of the Fair Debt Collection Practices Act either. Mail from a creditor reminding you that you owe a payment can be marked accordingly, while mail coming from a third party debt collection agency must not show any indication that it is an attempt to collect money. To Be Continued In Parts Two And Three

Mallory Megan works for Rapid Recovery Solution and writes articles about nationwide collection agencies. Check here for free reprint licence: Debt Collection Broken Down As Basic As You Can Get Part One.

The proof is in the pudding, and here it is. The amount of lawsuits and complaints about abusive, illegal and strong arm collection tactics that some dishonest debt collection agencies use to collect has increased significantly in the last couple of years. Lawyer, Michael J. Koopmans, an attorney who represents consumers who have been wronged weighs in with his thoughts. According to Koopmans, he handles thirty to fifty cases at one time, all of them clients who claim that they have been bullied, harassed, and even threatened by collection companies.

Koopmans points out that this is a time where consumer debt is at an all time high and the economy is at an all time low, and at a time when a lot of people cannot afford to pay what they owe in one lump sum, he has noticed that collection agents are becoming less and less willing to work out some sort of a payment plan. “Now the collection agents are claiming they can’t do that” says Koopmans. “They say they’re only going to have this account for a short while, that they need a lot of the money, they need it fast, and they need it up front.”

Deputy Attorney General of Indiana, David Paetzmaann claims that his workplace receives at least a dozen telephone calls every week from people complaining about collection agents who they feel are harassing them. According to Paetzmann, the number of calls has increased by more than twenty percent from just four years ago.

One of the agencies that has received the brunt of complaints is called Premiere Credit of North America. A spokeswoman has countered that the agency has “tough policies, training, and monitoring against harassment and threats.” What does Paetzmann suggest? That consumers break out the books and bone up on their knowledge of the Fair Debt Collection Practices Act and the legal restrictions that it puts on collection agents.

First of all, a debt collector is only permitted legally to call debtors between eight o’clock AM and nine o’clock PM. Additionally, the act also strictly prohibits collection agents from lying to you by claiming that they have the authority to arrest you or seize your property (they don’t). They are not permitted to discuss your debt with anyone else, and attempting to collect a fee for themselves in addition to the amount you already owe is clearly illegal as well.

Mallory Megan works for Rapid Recovery Solution and writes articles about nationwide collection agencies. Check here for free reprint licence: Complaints About Debt Collectors Are On The Rise.