In their attempts to collect from you, debt collectors may use an aggressive tone, display no sensitivity or concern for your finances, or talk to you disrespectfully. Some collectors cross the line and use threats or scare tactics to try to get you to pay up.
Although debt collectors may use scare tactics in an attempt to make you pay your debt, their scare tactics are not always legal. Always refer to the FDCPA and report a debt collector using unfair scare tactics to retrieve your debt.
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.
Although the average settlement amounts to 48% of what you originally owed, that number is a bit skewed. If your debts are still with the original creditor, settlement amounts tend to be much higher. You can end up paying up to 80% of what you owe if the debt is still with the original creditor.
You are past-due, or delinquent, on your bills and your card issuer's collections representative calls you to pay your overdue balance. After about six months (depending on the lender), they will give up.
With nearly 85% of respondents reporting that they experience stress or discomfort during the process, it is clear that debt collection poses significant challenges for businesses and individuals alike.
You can write a letter telling the debt collector to stop their contacts. Once they receive the letter, the debtor can no longer contact you, except to state that there will be no longer be any contacts or to notify that the creditor or debt collector will take specific actions to collect payment.
Ignoring or avoiding the debt collector may cause the debt collector to use other methods to try to collect the debt, including a lawsuit against you. If you are unable to come to an agreement with a debt collector, you may want to contact an attorney who can provide you with legal advice about your situation.
If you get a summons notifying you that a debt collector is suing you, don't 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) and garnish your wages and bank account.
Debt-to-income ratio targets
Now that we've defined debt-to-income ratio, let's figure out what yours means. Generally speaking, a good debt-to-income ratio is anything less than or equal to 36%. Meanwhile, any ratio above 43% is considered too high.
Having an account sent to collections will lead to a negative item on your credit report. The mark is likely to stay on your credit report for up to seven years even if you pay off your debt with the collection agency. It's also possible that paying off your collection account may not increase your credit score.
However, they may file a lawsuit against you to collect the debt, and if the court orders you to appear or to provide certain information but you don't comply, a judge may issue a warrant for your arrest. In some cases, a judge may also issue a warrant if you don't comply with a court-ordered installment plan.
One controversial tactic in debt collection is a relatively new term, debt shaming. This involves some level of public disclosure by the collector to bring attention to a debtor who has not satisfactorily paid their debt.
However, can you actually go to jail for debt? The answer is no – even if the debt is linked to a crime like tax avoidance or ducking a debtor's examination, you can only be charged for the crime and not the debt itself.
Six Year Limitation Period
For most debts, a creditor must begin court action to recover the debt within six years of the date you: Last made a payment. Admitted in writing that you owe the money.
Debt collectors are not allowed to come to your house or phone you demanding payment between 10.00 pm and 7.00 am each day and not at all on public holidays. There are strict controls on debts collectors. They must be licensed and they are not allowed to threaten you.
The average American debt totals $59,580, including mortgages, auto loans, student loans, and credit card debt. Debt peaks between ages 40 and 49, and the average amount varies widely across the country.
Worse than being in debt is losing your peace.
It's called being human. For some people that adversity takes the form of being in debt. The main thing is to keep your peace, to know that God is taking care of each of us, and to remember to trust Him to provide.
* The amount and type of debt varies with credit cards topping the list, followed by mortgages, auto loans and student loans. People between the ages of 35 to 44 typically carry the highest amount of debt, as a result of spending on mortgages and student loans.