home loan finance blog
Many of you are past the point of negotiation with your creditors and are in a situation where your phone is ringing daily, mail (sometimes certified) comes to your home and or office and you may have even been served with a lawsuit. There are several things you can do to protect yourself, your funds and your credit at this point but you must be diligent about how you approach each scenario. Let’s take them one at a time.
1) Stopping the Collectors from Calling – This doesn’t require much effort but is critical to your maintaining a calm state of mind during your difficult time. The FDCPA (Fair Debt Collection Practices Act) provides some relief for those of you in need of stopping the harassing calls to your home or work place. In particular the first thing you want to do is stop the phone calls. To do this you need the street address and maybe the fax number of the collector or creditor along with the account number or reference number they assigned to your case.
Once you have their address and or fax you construct a very simple letter. Make sure you send it via certified mail return receipt requested. The calls will stop and if not, you can send a copy of the letter and certified return receipt to the FTC and or your state agency for help with compliance.
To: Company Name
From: Your Name
Date:
Re: Account # or Reference#
Please be advised that in accordance with the FDCPA section805 I wish not to be contacted by telephone at home or work for any reason. In addition please accept this letter as my written dispute of the alleged debt as provided for under the law I respectfully request the following.
1) Copy of original signed contract (if applicable)
2) Copy of all bills and or statements (and receipts if credit card debt)
3) Copy of any payments bearing my signature
4) Copy of any dunning notices (collection letters / late notices)
I will expect these to be delivered via U.S. mail to me within 30 days of receipt of this letter.
Thank you, ______________
2) Dealing with Lawsuits – It is important to remember that in most states a judgment can be collected upon (executed) for up to 20 years. It can only remain on your credit report for 7 years from the date of adjudication (date the court gave your creditor the judgment against you). Do not ignore a lawsuit, argue with the judge or creditor about it or take it lightly. In most states you have a specific time to “answer” the complaint. If you don’t answer most states will enter a judgment by default against you. That means you ignored it and they (the creditor) won. Game over.
Instead the very best thing you can do is speak to an attorney. Be sure to file an answer through your attorney if you can afford one. Most lawyers will work with you and help at minimum protect you from a default. The next step is to determine if the debt is in fact owed or not. If it is owed your lawyer can negotiate a settlement and payments you can afford without breaking you. If it is not owed they can defend you. If you used the letter above and never received the requested docs and then they file suit you have a defense and need to show your letter and return receipts to the attorney. If you did not use the letter above before the suit was filed only a proper answer of affirmative defenses will do. If you cannot afford an attorney I strongly suggest you consult one anyway and then research your states rules of civil procedure. You will need a form for answering with affirmative defenses and perhaps motion to dismiss. Again just a phone call to an attorney here can be worth 10x it’s weight in gold.
Most importantly -Don’t ignore it. Don’t contact the creditor or collector yourself by phone once you are served and Don’t lie to your attorney about any part of it. They can’t help you if you leave information out. If you act promptly you will not be in default and therefore will not have a judgment on your credit report destroying your credit worthiness.
Dealing with aggressive debt collection takes knowledge (Read the law cited above), patience, diligence and in some cases professional assistance. Don’t lose your cool, it won’t solve anything and don’t make promises you can’t keep to hold them off for a week or two. That will not help later.
More Coming,
Steve Blisko