If you have never been approached by any debt collection agency, you ought to consider yourself lucky. Debt collectors vary from the slightly annoying to the harassing and downright rude collectors. You never know which one you will get. You may think that debt collectors only get past your loans and credit cards, but this may not entirely true. The truth is that debt collectors can collect just any type of debt past its due date.
What is debt collection?
Debt collection simply refers to methods employed by a company to recover debts from an individual or another company. Generally, debt collection comes in place when debt remains unpaid for a long time. Commercial debt will refer to cases where the debt should be paid through any business. Businesses can entrust the job of debt collection to agencies made specifically for debt collection. Some big business actually have a separate section of their department devoted solely for debt collection. Agencies collect debt through certain policies used in collecting liabilities.
Types of debt collections
Any time you owe money to any business, you have to pay them based on the agreed time. They will send bills for some months, if you show no concern in paying, they may opt for a debt collection agency. Unpaid utilities, medical fees, library fines, contract termination fees or simply school lunch money are all debts. These are the most common forms that debt collectors frequently collect on. It is the small debts that often cause a lot of damage. Damage that could be hard to recover from the worth of the debt.
Commercial debt collection
For commercial debt collection, it will include debt payable by one financial organization to another company. The practices employed here are different and depends on the resources, assets of the debtor and the kind of business they have. There are a number of companies that would need the services of debt collectors. Such companies should also engage the services of a debt collecting lawyer that would represent them through the entire process.
A third party trustee
Third-party trustee are agencies given the job of collecting debts. They will start the process of recovering debts through collecting their debtors in person, by phone or through send warning letters. Commercial debts is more intricate, compared to other debts such as consumer or retail debts. Collectors usually try to find a strategy that is mutually acceptable to everyone concerned. Frequent calls are made to the debtor, they encourage them to reach a settlement soon. When making such calls, debt collectors should prove their identity. They should then convey their intent in making the phone call. The debtor should ensure that throughout this process, there is no form of harassment or threats. If all efforts to collect the desired debt fails, a lawsuit is then filed.
Fair debt collection
Even though many people know how stressful it is to undergo debt collection, many do not know about their rights. One commonly violated rule of debt collection is using deceiving and misleading statements. Many debt collectors are known for their persistent efforts, this include lying or coming up with false claims so as to scare you in paying the debt. This is so true with the elderly, who are frequently scammed to paying debts they can hardly afford just due to fear. Debt collectors frequently become harassing, this is through unending phone calls, contacting family members or friends, after hour calls and even using abusive language in a bid to collect debts. All of these practices are prohibited by the law.
Unfair debt collection
Unfair debt collection are crude or illegal methods employed by debt collection agencies. This could include contacting though social media sites or email and releasing your personal information to the public, this is entirely forbidden. Any form of harassment or abuse to you or by third party is considered illegal too. Harassment could include using threats of violence or causing harm, publishing a list of names about the people that refuse to pay their debts, using abusive language or repeatedly annoying the customer on the phone. Use of any false statements to collect debts is also illegal.
How to stop debt collections
Fortunately, you can end the entire annoying process of debt collectors through a few methods. You have the rights to negotiate repaying your debts directly to your lender. Even if the creditor has already turned the account to the debt collection agency, you still have a way to resolve your debts. This can be achieved by simply contacting your creditor and arranging for a debt resolution negotiation. You could also request the debt collection agency efforts be terminated. Your creditor is legally required to terminate interactions between you and the debt collection agency upon your request. Such a termination should be made once you have agreed to deal.
File for bankruptcy
You can also stop debt collections agencies through filing for bankruptcy. When you file for bankruptcy, all efforts by the debt collection agency should stop immediately. Any contact by the collection agency could lead to serious consequences on the creditor’s part. Once you file for bankruptcy, communication between the collector and the debtor should be through a bankruptcy attorney. Bankruptcy is a great option to deal with creditors especially when it is beyond your ability to repay the debts or are simply struggling to negotiate with creditors. You could also opt for this method in case you have received a notification of lawsuit over the collection process or have critical assets at risk.
Debt collection is not an easy thing, there are countless debt collectors that never see money which is owed to them. The debtor could ignore attempts by the collector to contact them. Unpaid debts has increasingly become a big problem, many debt collectors have even come up with debt collector systems. The debtor too has to ensure that there is no form of harassment throughout the entire debt collection process. In case one needs to stop the debt collectors, one can negotiate with the creditors to come up with a viable solution or simply file for bankruptcy.