Debt Collection Lawyer
Hopefully you will have come to an arrangement with your creditor long before a debt collection lawyer is involved but for those that haven’t, it may be a good idea to set the record straight about a couple of myths now circulating.
The debt collection statute of limitations is one get out of jail card those companies that promise to get rid of all your loans and credit card payments in one easy step will use. Before you waste your money using these so called credit experts, please note that it simply isn’t possible to legally write off debts without having taken action to repay it. You can often reach a debt settlement with your creditors but that is not the same as using the statute of limitations.
Certain debts can become time barred debts depending on the State Law where you live. Some States say debts that are outstanding for longer than 3 years are time barred, in others this is ten years so you do need to check. Debt collection agencies can still attempt to collect time barred debts but they cannot sue you to obtain payment so it would be unusual to hear from a debt collection lawyer in these circumstances. But time barred debts can still remain on your credit file for up to seven years with certain exceptions and can negatively influence your credit score.
If you are in debt and struggling to make payments you should familiarize yourself with the Fair Debt Collection Practices Act (FDCPA). This act governs the behavior of anyone connected to recovering money including the debt collection lawyer. For example if you or your family members are becoming stressed over the continuous phone calls and letters, you can write to your creditors and request that they stop contacting you. You just need to quote the FDCPA.
The financial institutions and their agents must obey these debt collection laws and can only write to you one final time for example to advise you that they intend to sue you. Don’t be mistaken though, the Act doesn’t write off the debt. All you have done is stop the contact. The Act also covers other issues such at the time of day you can be contacted, the procedure for contacting you at work and the time limits on debts etc.
A debt collection lawyer will have to fully investigate who owns the debt if you have been the victim of fraud. Debt collection in cases of identity theft is difficult for all concerned. The financial institutions need to prove that you are legally responsible for the debt. This can happen if you were careless with your pin number or you didn’t alert the card provider when the card was stolen etc. It is a very difficult situation to be in as most of us have enough to do with paying off the debts we ran up ourselves without also being responsible for those of a thief.
Did you know that a debt collection lawyer can seek a debt collection wage garnishment order to recover the monies you owe? This is one scenario you definitely want to avoid as most of these type of orders just calculate your disposable income on a set basis i.e. after deducting taxes and social security deductions. They do not care what your personal circumstances are and you may find that you will now struggle to pay bills like your home mortgage. The maximum deduction that can be imposed will depend on State Law but it varies between 15% and 25%. So before it comes to this stage, you should have explored every avenue possible including a debt collection attorney in order to enter into an arrangement to repay your debt or offer an amount in final settlement of the debt.
You can suggest to a debt collection lawyer that they accept a lump sum in full and final settlement of your debt. This can sometimes seem like the easy way out but there are consequences. For example you could cause yourself a tax problem with the IRS if the settlement amount is over $600 less than the outstanding debt. You may be taxed on this amount as income although obviously it depends on your personal circumstances. Entering into debt settlements will also impact your credit record which can have an effect on future borrowing.
