Consumer Debt Collection – Know Your Rights
One day a collections letter appears. Then another, more aggressive collections letter appears. All of this followed by phone calls, some warning you about bad credit reports and potential legal action.
To retrieve debt creditors hire collection agencies. These third party companys generally work on commission which fuels their vigorous attempts to retrieve money.
Collection agencies do have the right to report your debt to credit bureaus. Paying off the debt will not result in it being removed from your credit reports, it will be marked off as “paid.” They also can request a debtors credit report to analyze the person’s financial situation, or to get an updated address and phone number. And, although collection agencies do not like to send many accounts back, sometimes they will refer their account back to the creditor and recommend filing a law suit.
There are codes and procedures by which collection agencies must abide. Letters should appear in ambiguous envelops that do not reveal the intent of the letter. With phone calls, a collector can’t disclose the reason for the call. One example would be if a collector reaches an answering machine. they cannot explain why they are calling, all they can do is leave their name and a number where they can be contacted.
Although collection agencies are permitted to contact a debtor’s place of employment, they absolutely cannot get a debtor fired from their job. They are not able to make any kind of information concerning the debt public, although they can communicate openly with credit bureaus. Despite the fact that many people believe that a collection agency could legally seize a debtor’s bank account, paycheck and assets, the company cannot unless their has been a successful law suit ordering them to do so. Under no circumstances can a collection agency threaten a debtor with violence.
Despite the fact that some collections agencies may attempt to practice illegal tactics to get money, there are also a large number of reputable ones. With important issues like debt, it is always a priority to know your rights.
Mallory McGuinness-Hickey works for debt collection agency Rapid Recovery Solution and does free lance writing on the side.
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