A debt collection agency's worst enemy is an educated and vigilant
consumer. The single fact they really don't like anyone knowing is that
you have thirty days to dispute the validity of the collection agency's
claim on your money. If you don't send a letter requesting validation
before the thirty day deadline, the debt will stay on your credit report
for seven years – whether you pay it or not. However, properly dealing
with a debt collection agency does not end there, and is far from
simple. You should do as much research on your own as possible, and get
professional help to aid you in figuring out the finer details. A lawyer
would be your best option, but if you don't have one on hand or can't
afford an attorney, you can take advantage of our debt management counseling at no cost.
Video: Debt Collection Agencies (DCAs)
How a Debt Collection Agency Works
There are essentially two kinds of debt collection agencies - “first
party” and “third party.” A first party collection agency is a
subsidiary of the original creditor, whereas a third party collection
agency is a company that has either been assigned the debt, or purchased
the debt from the creditor. A first party collection agency is typically
only involved in debts younger than six months. After that point the
debt is either assigned or sold to a third party agency and written off.
When a third party agency is assigned the debt, they will collect a
percentage of the debt owed when collection is successful, but
collection agencies which buy debt typically pay either 3 to 7 cents on
the dollar, at most.
Empty Threats From Collection Agencies
Video: How to handle debt collection agencies
Although
federal law prohibits collection agencies from stating anything
which they either have no intention or ability to do, they will threaten
with the potentiality of a lawsuit because collection agencies can, in
fact, sue. However, unless you have resources which can be exploited and
the debt is at least $1,500, the chances of being sued are very slim.
Additionally, you should definitely look into the statute of limitations
in your state. Many states won't allow pursuit of a debt older than 7
years, some as little as 3 – but you should certainly have a look for
yourself and make no promises or payments to the collection agency in
the mean time, because that will “reset the clock” on the statute of
limitations. The agency may still try to sue after the statute of
limitations has expired, and you should show up to court and state that
the time limit has expired. Outside of that, a collection agency can
harass you until you send a
cease and desist letter – at which point they legally must stop all communication with you
except for certain notifications.
If the Collection Agency Sues and Wins
If a collection agency files suit and wins against you, then they can
and will pass any fees they can, along with seizure of whatever assets
you have – such as bank accounts, cars, homes, and bonds such as those
construction companies must have in order to operate. When a judge rules
in the collection agency's favor, there really is no limit to how badly
they can wreck your financial livelihood. Don't let that frighten you
though. If you arm yourself with information and professional help (such
as our no-cost debt management counseling) you can win.
Points of Contact:
Burnstein & Burnstein, Inc.
800-821-1490
Leland Scott & Associates Inc
(817) 539-7350
A R Recovery Solutions
(808) 678-8100
CNC Financial Group LLC
(843) 836-2051
Alco Collections
(225) 751-5660
C R & Associates
(734) 677-0904
Direct Recovery Associates Inc
(818) 874-0011
Excel Account Systems
(678) 289-0207
G C Service
(858) 577-2300
J Scott NOVY
(903) 753-4955
Lyons Roar Judgement Collections
(877) 242-6553
SouthWest Medical Billing & Collections
(951) 956-8058
Weisberg Law Office
(952) 933-5040
A Nationwide Recovery Network Inc.
(888) 300-5437
Account Collection Service Inc
(360) 574-4131
D & D Debt Recovery Inc
(507) 208-4150
Deb Ron International
(937) 293-8244
Dolce Billing & Corporate Service Inc
(631) 940-1120
knowing is that
you have thirty days to dispute the validity of the collection agency's
claim on your money. If you don't send a letter requesting validation
before the thirty day deadline, the debt will stay on your