What to Expect When Your Debt Goes to Collection

What to Expect When Your Debt Goes to Collection

The thought of debt collectors repeatedly calling your house or trying to track you down at your job, can be frightening for anyone. But many times, it is the fear of the unknown that makes people so nervous about debt collection. It helps to understand what to expect and what rights you have as a consumer when it comes to dealing with debt collectors.

When Do Debts Go to Collection?

Normally, your debts go to collection after you have missed multiple payments on the debt, ignore the creditor’s communications and fail to set up a payment plan with the creditor. Once a debt gets to the stage of what is considered “delinquent,” meaning the bill has not been paid for more than 90 days, it is turned over for collections. This step can mean the original creditor tries to collect on the debt, the debt is sold to a third-party debt collector, and the report of the delinquency will be sent to a credit reporting agency. The whole process will typically take three to six months after the first time you default on a payment. The most common types of debt sent to collections are credit card debts, medical debts, and utility payments.

Who Is Collecting on the Debt?

If you have only missed one or two payments, chances are the original creditor with whom the debt began will collect on the debt. However, after some time has passed, the original creditor may choose to sell the debt to a third-party debt collection agency. Many companies have contractual arrangements with debt collection agencies who have been hired with the sole purpose of collecting on assigned debt. If a collection agency other than the original creditor is now in charge of collecting on the debt, you will likely notice that the type of communication, as well as the tone and frequency may change.

Debt collection companies have this down to a science. They know what tactics work and what tactics do not, and many times, persistency and instilling fear in the mind of consumers are the strategies they use. They only get paid for results, which means that they will do what it takes to try and get you to pay on the debt.

It is important to remember that debts have an expiration date known as the statute of limitations that keeps debt collectors, and even the original creditor, from collecting on the debt. Before you agree to pay on a debt you feel has expired or you have already paid, make sure and check if the statute of limitations has already expired. Even if the statute of limitations has expired, some debt collectors will continue to attempt to collect. They are hoping that you are unaware of this law and will be intimidated by their collection attempts and pay up anyway. They may even file a lawsuit against you. If you are certain the statute of limitations has expired, you can use that fact as justification that you do not have to pay the debt. Debt collection agencies also sometimes get paid for every contact, including letters or phone calls, they make on an account, which can be why many tend to contact consumers repeatedly.

Know Your Rights

When it comes to debt collection, it is important that you know your rights. You have the right to request and receive written confirmation from the debt collector on the amount you owe. Many agencies will have inaccurate or dated information. After reviewing their documentation, you may find that they are not reflecting all the payments you have made on the account, and had you not requested this information, you may have ended up paying more than you needed to pay.

You also have the right to be free from debt collector harassment and abusive communication. Under the Fair Debt Collections Practices Act (FDCPA), consumers have the right to fight back against abusive, threatening or harassing communication from third-party debt collectors. Consumers have the right to not be contacted at work after informing the debt collector to stop communicating them there and to not have the debt collector share information on the debt to other individuals. If you believe this federal law has been violated, you have the right to inform the debt collector in writing of the specific behavior that is considered an FDCPA violation. If the debt collector continues to contact you at that point, you may be entitled to financial compensation. However, you should contact an attorney first to discuss what type of communication has occurred before filing a claim.

If you are receiving continuous or harassing calls from a debt collector, we advise sitting down with an experienced Orlando bankruptcy attorney – particularly if you are facing wage garnishment or have a debt collection lawsuit pending.