You also have the right to dispute the debt if you believe it is inaccurate, the amount is wrong or you don't recognize the debt. You can request validation from the debt collector, requiring them to prove that you owe the debt and that they have the legal right to collect it.
Your debt is a tradable commodity. If your creditor sells it to a third party, then you owe it to the third party and not to the former creditor.
Most states or jurisdictions have statutes of limitations between three and six years for debts, but some may be longer. This may also vary depending, for instance, on the: Type of debt. State where you live.
Even though your card issuer "writes off" the account, you're still responsible for paying the debt. Whether you repay the amount or not, the missed payments and the charge-off will appear on your credit reports for seven years and likely cause severe credit score damage.
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
Once your debt has been sold you owe the buyer money, not the original creditor. The debt purchaser must follow the same rules as your original creditor. You keep all the same legal rights. They cannot add interest or charges unless they are in the terms of your original credit agreement.
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
This practice, debt buying, is legal and commonly employed by collection agencies seeking to recoup the money owed to creditors. However, there are regulations in place to govern this process and protect consumers from unfair practices.
Generally, paying the original creditor rather than a debt collector is better. The creditor has more discretion and flexibility in negotiating payment terms with you. And because that company might see you as a former and possibly future customer, it might be more willing to offer you a deal.
Typically, debt collectors will only pursue legal action when the amount owed is in excess of $5,000, but they can sue for less.
2) What is the 609 loophole? The “609 loophole” is a misconception. Section 609 of the Fair Credit Reporting Act (FCRA) allows consumers to request their credit file information. It does not guarantee the removal of negative items but requires credit bureaus to verify the accuracy of disputed information.
More frequently than most consumers probably realize. While precise statistics are difficult to come by, legal experts estimate that several million debt collection lawsuits get filed across the United States every single year.
Specifically, the rule states that a debt collector cannot: Make more than seven calls within a seven-day period to a consumer regarding a specific debt. Call a consumer within seven days after having a telephone conversation about that debt.
In some states, you can choose jail instead of repaying debt
Some states, including California and Missouri, offer a third option for those who cannot afford to pay their criminal justice debts: choosing jail. By choosing to go to jail, it may be possible to avoid wage garnishment and reduce criminal justice debt.
If you get a summons notifying you that a debt collector is suing you, do not ignore it—if you do, the collector may be able to get a default judgment against you (that is, the court enters judgment in the collector's favor because you didn't respond to defend yourself).
A smaller number (about 25%) sell patients' debts to debt collectors and about 20% deny nonemergency care to people with outstanding debt. More than two-thirds of hospitals in the sample sue patients or take other legal action against them.
Paying an old collection debt can actually lower your credit score temporarily. That's because it re-ages the account, making it more recent again. This can hurt more than help in the short term. Even after it's paid, the negative status of “paid collection” will continue damaging your score for years.
Within 30 days of receiving the written notice of debt, send a written dispute to the debt collection agency. You can use this sample dispute letter (PDF) as a model. Once you dispute the debt, the debt collector must stop all debt collection activities until it sends you verification of the debt.
Your creditors can transfer and sell your debt to a collection agency without your permission. However, the collection agency must contact you about the sale before attempting to collect the debt.