With 25+ years of collecting debt, I have heard it all when it comes to attempting to collect a debt. Many debtors are intimidated by the whole debt collection process, and believe that collectors are all powerful entities that are out to wreck your way of life. This is just a myth, Most legitimate collectors are just trying to do their jobs to the best of their ability and want to help you resolve the cloud hanging over your head, called debt. I’m not saying that there are not bad apples in the business, that give all of us a bad rap. The reality is that most of the time the collector is more scared calling a stranger asking for the debt to be paid then the debtor is receiving the call. Over the years I don’t know how many time I have lost collectors that just can’t do the job.
Which now brings me to my point, what is myth and what is fact? Just like in sales, in collections when a debtor give a reason why he/she cannot pay, this is called an objection. It is the collectors job to overcome that objection and get the debtor to pay the debt. This interaction is where the myths take place most. So lets get to the facts of the matter, or the myths.
Myth 1
The debt will just go away over time, if you ignore it long enough.
Fact
Honestly that might be true in some aspects, but the fact is that it will never just go away. Yes it has a statute of limitations that pertains to the amount of time that a person can legally be sued for the debt. Not to say that an agency will not sue after that allotted time, but all you have to do is prove that the statutes is up and it will be thrown out of court. Even after that time, which varies from state to state , it will still be on your credit report. Even after all those things expire the debt is still owed to the original creditor and will have to be paid before you can get services from them again, in most cases.
Myth 2
If you send a Cease and Desist letter to a collection agency the debt goes away.
Fact
A Cease and Desist letter does tell the agency to cease all communication with you in regards to the collection of the debt. The debt doesn’t go away just because the collection agency can’t call you, send you a letter, or communicate with you in any way. Once a Cease and Desist letter is received the agency may contact you one more time to acknowledge the receipt of the notice and to notify you of the agencies intent to further collect the debt. The right for litigation is still there and is the most obvious choice if there is now other means of collecting the debt.
Myth 3
If you pay a debt collection it will remove it from your credit or raise your credit score.
Fact
The fact is paying a collection is the best thing in that situation that you can do is you truly owe the debt. The collection is not required to be removed from your credit report until the time limit of the account is up. That time limit is 7 years from the original date of delinquency according to the FCRA. Although I would suggest that if you have the money to pay the account in full that you request that the item be removed after payment is made. Get it in writing that the account will be removed. Most likely that payment of the debt will not help your credit significantly because it shows that it was charged off to collections. Eventually it might raise your score but possibly not, but it is always better to show as a paid charge off than a delinquent one.
Myth 4
Debt collectors have to stop calling you if you tell them to stop.
Fact
This is presumed that if I tell someone to stop calling they have to stop calling. Truly the only way to stop a debt collector from calling you is to send it in writing which is known as a Cease and Desist letter. Now there are stipulations to that, if a debt collector calls you at work and you tell them not to call you there then they cannot call your job again. Another chink in the armor, is that if you say that it is not a good time they cannot call at that time again. Now if the collector is calling with a ATDS then you can request that the collector no longer calls your cellphone with a ATDS. It is actually illegal to call a cellphone without authorization to do so by the cellphone owner. That permission is usually obtained by the original creditor at the time of services.
Myth 5
Making a partial payment will get the debt collector off your back.
Fact
The full balance is due when turned to collections. Making a partial payment although will get the debt paid off, but does not stop collection efforts. Now setting up an arrangement to pay the accounts of through the debt collection agency will hold off the agency as long as you keep the arrangement. Once they have agreed to an arrangement and you have agreed to the same arrangement then they are bound by that arrangement unless you break the arrangement.
Myth 5
Debt collectors can put you in jail if you don’t pay your collection.
Fact
This is totally absurd. Debtor Jail was abolished in 1833 and then affirmed by the Supreme Court in 1983, they stated that incarcerating indigent debtors was was unconstitutional under the Fourteenth Amendment’s Equal Protection clause. Any collector that implies or threatens jail is in violation of the law.
Myth 6
You can bypass the debt collector and pay the original creditor.
Fact
Although some people would rather pay the original creditor than a collection agency in most cases the creditor and the agency are under contract and the creditor cannot take payment for the debt. There are instances that the debt was purchased by the agency and the creditor no longer owns the debt. Even if the creditor allows you to pay them it doesn’t circumvent the agency which still gets the commission owed them and the payment is reported to them as collected.
Myth 7
Debt collectors cannot garnish your wages if you don’t pay.
Fact
The fact is that you can be sued and a judgement can be obtained on a valid debt. Now depending on the state that you live in determines if the agency can garnish to collect that judgement. Most states allow garnishment for debt. A collector can not threaten garnishment when a judgement has not been obtained and you live in a non-garnishment state such as Texas. There are too many variables to guess at weather a collector could garnish on a debt, but some agencies do sue and obtain judgement with the sole purpose of garnishing to collect the debt.
At Midwest Business Cycle Management we want you to know your rights and we want to help you get back to financial freedom. If you have any questions about your right as a debtor or the legality of a collector feel free to send me message here on our site or twitter at @midwestbcm.
Midwest Business Cycle Management 