Debt Collections Archives - FREE CONSULTATION

Millions of Debt Collections Disappear from American Consumers’ Credit Reports

Posted on March 21, 2023by Admin

Millions of debt collections disappeared from American consumers’ credit reports during the COVID-19 pandemic, according to reports from the Consumer Financial Protection Bureau (CFPB). Even though a large number of collections cases dropped off credit reports, overdue medical debt still remains a major consumer problem.

According to the CFPB, the total number of debt collection cases on consumer credit reports went from 261 million in 2018 to 175 million in 2022, dropping 33 percent (33%). Additionally, the number of consumers who had a debt collection on their credit report decreased by 20 percent (20%) between 2018 and 2022.

Debt Collection

Does Paying Off an Account in Collections Raise Your Credit Score?

Posted on September 19, 2020by Admin

A collection case will almost certainly damage a consumer’s credit score, which is why so many people attempt to avoid collections at all costs. The goal is to settle the matter as soon as possible to fix the damage done. But paying off an account in collections does not necessarily mean that the consumer’s credit score will immediately improve.

A collection account shows up as an entry on a consumer’s credit report. Essentially, the collection shows anyone who checks a consumer’s credit report before offering any type of lending that the consumer defaulted on a previous liability. Many times, a collection account will start once the original creditor sells the debt to a third-party debt collection agency or to a debt buyer.

Bankruptcy Law, Credit, Timothy Kingcade Posts

How Long Do Debt Collections Affect Your Credit Report?

Posted on March 14, 2019by Admin

When you are being pursued by debt collectors, the incessant phone calls can make you feel anxious and stressed. The number one piece of advice we give when dealing with creditors is to be honest with them. Never make a promise to pay if you are unable to do so and do not avoid creditors or collection attempts.

A collections action is essentially any type of collection on a debt. Whenever a creditor submits an account to collections, a notification is submitted to the credit reporting agencies. This notification will almost always result in the consumer’s credit score dropping. The more collections that show up on the person’s credit report, the bigger the drop will be. Any type of collections will show up on a credit report, including credit cards, medical bills, loans and mortgages.

Once a collections action is reported, it will stay on a person’s credit report for seven years. The same time period applies for missed or late payments. To put these figures in comparison, a Chapter 7 bankruptcy case will stay on a person’s credit report for ten years and Chapter 13 bankruptcy for seven years.

Credit reports treat debts all in the same manner, so if the collection is for a secured debt, such as a home or car, it will be treated the same way as credit card debt. However, medical debt is treated somewhat differently than other unsecured debt. New rules regarding medical debt have made it more difficult for it to impact your credit score as quickly. The new rule builds additional time between patients and insurance companies to resolve such matters. Up until this point, there was no grace period and medical debt could appear on your credit report as soon as it was reported as an unpaid debt. The three credit reporting agencies now have to wait 180 days before putting an unpaid medical bill onto your credit report.

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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.

Related Resource:

https://www.myfico.com/credit-education/faq/negative-reasons/how-long-negative-information-remain-on-credit-report

Debt Relief, Timothy Kingcade Posts

Debt Collections for Furloughed Vets Suspended by VA

Posted on January 24, 2019by Admin

The government shutdown has been a nightmare for many federal employees and those who receive direct government benefits. An estimated 800,000 federal government employees have not been paid during the shutdown. The New York Times reports that the typical government worker has gone without $5,000 in pay so far. Just last week, Trump recalled 46,000 furloughed staffers to work without pay.

One group has been hit particularly hard, and that group includes federal employees and their family members who have debts with the Department of Veterans Affairs. As no end seems to be in sight for the government shutdown, the VA has announced that those affected by the shutdown will be eligible for a temporary suspension of collection activity.

Additionally, any veterans who owes money to the VA based on over-payment of a benefit, including compensation or GI benefits, can also request the VA automatically suspend any collection attempts up to 90 days.

These types of stays of collection actions are normally only available during a bankruptcy automatic stay. The VA has said that veterans who are furloughed employees or family members of a furloughed federal employee can request this suspension of collection activity up until April 1, 2019.

If these individuals are interested in receiving a collection activity suspension, they need to prepare and submit a completed VA Form 5655 (Financial Status Report). This form can be submitted by mail, fax or electronically.

When completing the form, it is important that the individual completes all information fully and accurately. In block 36, indicate that you are a furloughed federal employee or a family member of a furloughed federal employee. Additionally, any veterans who has medical debts can also request a suspension of collection actions.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

What Happens during the Debt Collections Process?

Posted on September 7, 2018by Admin

Debt collections are easily one of the most stressful situations a person can face. Dealing with debt collectors is also one of the most complained about issues, and it is not hard to see why. It helps to know how to handle debt collectors and the protections you have as a consumer.

When you are struggling to make ends meet financially, it can be frustrating to have debt collectors calling you or even worse, the threat of having your wages garnished or a lawsuit filed against you. A strong federal law, called The Fair Debt Collections Practices Act (FDCPA), protects consumers against certain unfair collection practices, which include:

Calling you repeatedly to annoy or harass you.
• Trying to collect more than you owe.
• Fail to send a written notice of the debt.
• Threatening violence.
• Threatening dire consequences (i.e. – lawsuits, criminal prosecution, wage garnishment, jail time, permanently ruining your credit).
• Using profanity and abusive language.
• Calling before 8 a.m. or after 9 p.m.
• Revealing debt to third parties (i.e. – family, neighbors, friends, co-workers, etc.).
• Contacting you at your work, after you have requested them to stop.
• Failing to verify disputed debts.
• Ignoring cease communication requests.

What Happens During Collections?

The first thing a consumer will notice after an account has been sent to collections is the number of calls from the creditor or the collection agency will increase. Debt collectors will try any means possible to get a hold of the debtor and get payment, even if this means violating a consumer’s rights. The debt collector will contact the consumer at any location possible, including home, cell phone or work number. When it comes to contacting you at work, certain restrictions do exist. The debt collector may not disclose any information regarding the individual’s debt, and if the individual requests that the communication stop at that point at the place of employment, under The Fair Debt Collections Practices Act (FDCPA), the collector may not contact the person at work further.

The FDCPA also dictates other requirements as to when the collector can call, which is only between the hours of 8 a.m. and 9 p.m. The debt collector is also restricted from using any language or tactics that may be deemed harassing, threatening or abusive. If the debt collector tries to contact other third parties, such as friends or family members of the individual, they may not disclose information on why they are trying to reach the debtor but can only contact them to get the correct contact information for them.

Validation of Debt

Consumers have the right to request written validation of the debt from the debt collector. In fact, the debt collector is required to notify you that he or she has the right to request this validation within 30 days after receiving the first written communication from the debt collector. Requesting validation of the debt from the debt collector can also be done over the phone. By requesting validation of the debt, the consumer is making the debt collector verify that the debt is actually owed.

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Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How to Handle Debt Collectors When They Call

Posted on September 1, 2017by Admin

Receiving a call from a debt collector can be stressful, especially if you are tight on money. However, sometimes collection agencies have the wrong contact information or may be trying to collect on a fake debt. Collection agencies may also use aggressive tactics to scare you into paying a debt. Here are some tips from the Better Business Bureau to help you respond to debt collectors correctly.

Your rights under the Fair Debt Collection Practices Act:

Debt collectors are required by law to provide information in writing. If you are contacted by a debt collector, ask to be provided with an official “validation notice” of the debt.
You must respond in writing within thirty days of receiving the debt notice to avoid further action by the collector. If you have proof that the debt has been paid, provide that as well.
A debt collector must prove that you owe the money before they can try to collect if you dispute the debt in writing within 30 days.
They cannot harass, oppress or abuse you. They are prohibited from swearing at you or calling repeatedly.
They cannot contact you at work if you tell them not to do so.
They cannot continue to call if you request, in writing, that they only communicate with you by mail.
They cannot collect a debt that you do not owe.

Click here to read more on this story.

If you 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 www.miamibankruptcy.com.