Debt collectors will tell you just about anything to get you to pay on a debt. They are persistent, to the point of being rude or even harassing at times. One thing that many debt collectors, especially the less-than-reputable collectors bank on is the fact that you will not know when your rights are being violated or when you are being lied to.
How do you know whether you are being fed a line or whether you are being told the truth by a debt collector? Here are some of the most common lies debt collectors will tell you.
Threatening to take you to court – even jail.
Under the Fair Debt Collection Practices Act (FDCPA), third-party debt collectors cannot threaten to take you to court on a debt if they have no intention of actually doing this. Many also will threaten to garnish your wages if you do not pay. Wage garnishment does not occur that easily. It only happens after a debt collector files a formal legal claim against you, a hearing is held where you have the right to present your side of the story, and a judgment is issued. Only then can a debt collector file a wage garnishment, which still has to be granted by the judge before your wages can actually be garnished. Many collectors, however, will make these statements in hopes that they will scare you enough into paying them.
The debt collector does not have to prove you owe the debt.
This lie is another one that goes directly against the FDCPA. If you are contacted by a debt collector who claims you owe money on a debt, you have the right to request written proof or validation of the debt. You then have 30 days normally to dispute the debt, if you do not believe you owe it. In fact, under the FDCPA, consumers have the right to send the debt collector a formal letter known as a “debt validation letter,” requesting more information on the debt to see what amount is owed.
This validation includes a complete payment history, a copy of the original loan agreement or credit application and proof that a third-party debt collector has the right to contact you on the debt, if someone other than the original creditor has contacted you. Many collectors will say they do not have to legally provide you this proof, but that statement is completely untrue.
Additionally, according to the Federal Trade Commission (FTC), if a creditor cannot validate a debt, the creditor cannot collect on the debt, is not permitted to contact you on the debt, and is not allowed to report your debt to creditor bureaus. Violating this provision is a violation of the Fair Credit Reporting Act and can result in a $1,000 fine.
Paying off the debt immediately will improve your credit score.
Mentioning your credit score is often a quick way to get you to act, and debt collectors know this fact. Many collectors will claim that you can immediately improve your credit score if you pay them immediately. The problem is, once your debt is in collections or is considered 90 days past due, this blemish will stay on your credit reporting even if you make an immediate payment to the debt collector. They cannot promise that your credit score will improve with that payment because it simply is not possible. It is possible, however, to get a written agreement from the creditor or collector that they will remove all negative information from them on your credit report, but most consumers are not aware of this possibility, so it is rarely utilized.
Threaten to expose your debt to others.
Debt collectors may also threaten to expose you and the fact you owe this debt to others you know, including family members, friends, even your employer. However, under the FDCPA, debt collectors are prohibited from revealing any information about the debt to anyone other than the debtor. This protection is meant to keep the debtor free from intimidation or harassment from debt collectors and to keep this information private, as it is personal information only to the debtor. If the collector makes this threat, report the company immediately to the FTC as they are violating federal law.
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If you have 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 of 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 McMaken 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 McMaken website at www.miamibankruptcy.com.