Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

What happens when credit card companies sell your debt?

Barclaycard sold $1.6 billion of credit card balances in the first quarter of 2017 to the personal-loan company, Credit Shop Inc.  Oftentimes, the accounts that are sold are ones that the card issuer has determined to be too risky for its business or are already in delinquency.  In these type instances, a card issuer can sell the account balances for pennies on the dollars.

Here is what you need to know if your credit card company sells your debt.

The reasons card issuers buy and sell debt.  Some debts are more “reliable” than others.  For this reason, cardholders pay widely different interest rates, depending on how risky the lender judges them to be.  “Subprime” borrowers tend to pay substantially higher interest rates to make up for the possibility that they might not be able to pay back the debt.

How will you know if your debt has been sold?  In many you will only find out if your debt has been sold when you hear it from the new owner or a debt collector calls you and demands payment.

What if a debt collector calls? If you receive a call from a debt collector, the Fair Debt Collection Practices Act protects you from abuse and harassment.  A debt collector is not allowed to call you excessively or make any threats.  They are also prohibited from calling you before 8 a.m. or after 9 p.m. and cannot misrepresent the amount you owe.  By law, you have the right to demand documented proof of the existence of the debt and the amount you reportedly owe. This request must be made in writing within 30 days of the first contact from a debt collector. During the time it takes to investigate and reply to your request, all calls from the debt collector must stop.

You also have the right to request that all future contact be made in writing. This can prevent disruptive and embarrassing calls at home or at work.  You have the right to sue if a debt collector violates any of these rules.

What responsibilities do credit card companies have? Under the federal CARD Act, which went into effect in 2010, credit card companies are required by law to give cardholders 21 days from the date the statement mails to make a payment.  Credit card companies are also required to provide a 45-day written notice before any rate increases. If you receive this notification, consider paying off the account if you are able to or transferring your balance to a low-interest credit card or zero-percent interest card, which overtime will be less costly to repay.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at

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