Settling with a collection agency may appear to be a viable option if the debt collector offers you a good deal, you believe you can afford it, and you just want the collection agency to stop harassing you over the unpaid debt. Unfortunately, many consumers have settled a debt with a collection agency only to find themselves with a brand new debt a few months later or worse-in court. collection agencies? It doesn’t matter what you feel you know about collection agencies, read personal loan application near Mississauga, to learn so much more about this topic..
If the unpaid debt the debt collectors claim you owe is particularly old, there is a good chance that you are not legally liable for it anymore. This is because a debt collection statute of limitations exists for any state that regulates the number of time a debt collector has to gather the debt from you. Granted, the statute of limitations only refers to the quantity of time a collection agency has to sue you, however, if the collection agency cannot sue you to gather the debt, the worst it can do is call you repeatedly and firing off a cease and desist letter takes care of that problem. Explore this site. PayDay Loans website Mississauga.
Settling a debt, however, resets the statute of limitations as soon as you make the very first payment. Thus, unless you are going to pay off the debt settlement in one lump sum, could put you in a precarious position if you lost your job or miss a payment. Should you be unable to pay, the collection agency will jump at the chance to drag you to the tribunal and garnish your wages.
Digging Deeper into Collection Agencies
Let’s say the original debt you owed was a neat and tidy $500. Once the original creditor charged off the debt, the collection agency added its own fees and interest to carry the debt up to a whopping $800. If the collection agency offers you a debt settlement for $400, you think you are getting a fairly good deal, right? But what happens to the other $400 that you owe? You assume its forgiven debt. However, you assume wrong.
Still another common fallacy that the public cannot seem to get rid of is the misconception that creditors are bounded by laws specifically the Federal Fair Debt Collection Practices. This act is basically just designed to safeguard the rights and the privacy of people in debt because it limits the methods debt collection agencies can use in order to gather your debt. Harassment and other abusive ways of debt collection are forbidden based on this act, for example. However, this act doesn’t forbid the collection agency from contacting you to collect your debts.
You should likewise be aware of another fallacy in debt collection. You should note that the Federal Fair Debt Collection Practices only cover third party collectors or debt collections agencies. This act doesn’t cover the methods that your direct creditor can use to gather the debts you owe him so you cannot expect the same protection if the creditor himself is the only to collect the debts. Another fallacy is that your creditor and the collection agency cannot take you to court if you don’t pay your debts. This is the most important fallacy you have to dispose of as it can get you into serious trouble.
But despite all the setbacks a debtor will deal with when their creditor avails of the facilities of a collection agency, these collection agencies are also victims of fallacies themselves.
Demand that the derogatory collection account be removed from your credit report once the settlement is paid.
Disclaimer: I am not an attorney and this isn’t to be regarded as legal advice. See a licensed attorney in your state for guidance specific to your situation.
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