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In today’s world, it’s important for you to know how to fight back when you’re being harassed by debt collection agents. You have rights. You need to protect your rights. And, that’s what this website is all about: how to write credit letters to stop harassment, to correct errors in your credit files, to remove outdated negative credit entries that are lurking in your credit report, and put bill collectors on notice that you’re not happy with them crossing the line when contacting you.
There are many times that the proper credit letter, even those written from sample credit repair letters, can put the law back on your side, give you time to confer with legal consul and get your credit financial house in order.
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To understand how screwed up the U.S. student loan collection industry is, read this insightful article posted on The New York Times’ website: “Behind he Lucative Assembly Line of Student Debt Lawsuits”
In it, this caught our eye: The CFPB had settled in September 2017 with two firms for more than $21 million in refunds and penalties for using illegal — and sometimes “sloppy” — collections methods. The CFPB spokesman was quoted as saying:
National Collegiate and Transworld “sued consumers for student loans they couldn’t prove were owed and filed false and misleading affidavits in courts across the country,” said Richard Cordray, the consumer bureau’s director.
This article will give you a keen insight into why you need to know what to do when a collection company comes calling — especially if the debt involved includes student loans. These companies are serious; you should stay vigilant to protect yourself.
The FDCPA limits where debt collectors may file collection lawsuits. Debt collectors may file in the judicial district or similar legal entity where the debtor resides at the time the case is filed or where the debtor signed the contract or agreement that forms the basis for the lawsuit attempting to recover the debt.
The judge in this case ruled this firm was out of order. The judgment for attorney costs and costs paid by the defendant were in excess of $70K. Somewhere in the story we noticed that the firm was on its way to winding down its operations. Not sure if that was decided before this judgment or afterwards.
Bottomline: Debt collectors need to follow the law. All laws. And, you the consumer, need to educate yourself as to that same law. It applies to everyone. Knowing the law is your best defense to protect yourself and your hard-earned money.
A statute of limitations is the legal term used that corresponds to that limited period of time creditors or debt collectors have available to them to file a lawsuit against you to recover a debt.
Why is this important to know?
Simple: Most statutes of limitations fall into the 3-6 years range, although in some jurisdictions statute of limitations might last longer. It all depends on where you live and where you lived when you took on the debt.
Here’s just a short listing of what debt collectors are barred from doing as they hound you over past due debts:
It’s the law… extracted from the Fair Debt Collection Practices Act, published by the Federal Trade Commission…
Harassment or abuse – A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is not allowed:
(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.
(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency.
(4) The advertisement for sale of any debt to coerce payment of the debt.
(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
The federal consumer financial protection bureau recently reported how student loan borrowers have been facing new problems getting the appropriate help in dealing with their loan paybacks… and a part of their latest report on the matter states:
“The Higher Education Act provides for a series of protections intended to facilitate repayment success, including the ability to make income-driven payments, receive loan discharge in the event of total and permanent disability, and consolidate older federal loans to become eligible for specific loan benefits.
“Yet federal student loan borrowers continue to struggle to access the protections guaranteed under federal law, many of which are designed to help borrowers avoid delinquency and default during periods of economic disruption or distress.
“The Bureau has previously discussed how servicing breakdowns can delay, deter, or deny access to federal benefits and protections, rendering them illusory for many student loan borrowers.”
David Lazarus wrote this opinion column on the Los Angeles Times website to draw attention to ignorant attempts by GOP lawmakers to muddle up this mess:
His column, in our opinion, pinpoints the source of many of the problems people are dealing with their student loan balances. This opinion piece provides good balance in moving forward to allow people to get a handle on this massive financial mess. Knowing how to write accurate, timely credit letters can give student loan borrowers the ammunition they need to deal with student local collection agents.
Mortgage scams have emerged as the leading source of complaints consumers have filed with the Consumer Financial Protection Bureau (CFPB), also referred to as the Consumer Bureau, since that organization was started back in 2011 in the wake of The Great Recession.
What caught our attention is this fact: Credit reports and debt collection are the second- and third-leading source of complaints form older consumers — complaints involving either inaccurate debt reporting or debt collectors using harassment, threats and abusive language, all forbidden by the CFPB.
“Many older consumers are at increased risk because of health or living conditions, including cognitive decline, isolation, disability or the recent loss of a loved one,” the report said. “These conditions can make seniors more appealing targets for scammers, more susceptible to misleading advertising, or more prone to misunderstanding confusing terms or fee schedules.”
For more info, check out the article on this website:
InvestmentNews.com published an eye-opening report related to this topic online previously that demands our attention, and needs to be shared widely to warn people of this growing danger to our elderly citizens:
(This public information is reprinted here from the official public information website run by the FTC, simply to give you an overview regarding the topic time-barred debts. This is not legal advice. Consult an attorney in your area if you need legal advice on time-barred debts.)
If you have old debts, collectors may not be able to sue you to collect on them. That’s because debt collectors have a limited number of years — known as the statute of limitations — to sue you to collect. After that, your unpaid debts are considered “time-barred.” According to the law, a debt collector cannot sue you for not paying a debt that’s time-barred.
This gets tricky for consumers because the statute of limitations varies from state to state and for different kinds of debts. It is also tricky because, under certain circumstances, the clock can be reset, and the time period can be started fresh. That’s why the Federal Trade Commission (FTC), the nation’s consumer protection agency, says it’s important to understand your rights if a debt collector contacts you about an old debt.
Under the federal Fair Debt Collection Practices Act (FDCPA), a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy unpaid debts and then try to collect them. The term ‘debt collector’ doesn’t include original creditors who collect their own debts.
When is an old debt too old for a collector to sue?
Typically, state law determines how long the statute of limitations lasts. Usually, the clock starts ticking when you fail to make a payment; when it stops depends on two things: the type of debt and the law that applies either in the state where you live or the state specified in your credit contract. For example, the statute of limitations for credit card debt in a few states may be as long as 10 years, but most states impose a period of three to six years. To determine the statute of limitations on different kinds of debts under each state’s law, check with a legal aid lawyer, another attorney, or your State Attorney General’s Office.
The statute of limitations for a debt is usually different from the reporting period for a debt on your credit report. In general, negative information stays on your credit report for seven years.
What should I do if a debt collector calls about a time-barred debt?
Collectors are allowed to contact you about time-barred debts. They might tell you that the debt is time-barred and that they can’t sue you if you don’t pay.
If a collector doesn’t tell you that a particular debt is time-barred — but you think that it might be — ask the collector if the debt is beyond the statute of limitations. If the collector answers your question, the law requires that his answer be truthful. Some collectors may decline to answer, however.
Another question to ask a collector if you think that a debt might be time-barred is what their records show as the date of your last payment. This is important because it helps determine when the statute of limitations clock starts ticking. If a collector doesn’t give you this information, send him a letter within 30 days of receiving a written notice of the debt. Explain that you are ‘disputing’ the debt and that you want to ‘verify’ it. The more information you give the collector about why you are disputing the debt, the better. Collectors must stop trying to collect until they give you verification. Keep a copy of your letter and the verification you receive.
Must I pay a debt that’s considered time-barred?
The decision to pay a time-barred debt is up to you. You have options, but each one has consequences. Consider talking to a lawyer before you choose one of these options:
• Pay nothing on the debt.
Although the collector may not sue you to collect the debt, you still owe it. The collector can continue to contact you to try to collect, unless you send a letter to the collector demanding that communication stop. Not paying a debt may make it harder, or more expensive, to get credit, insurance, or other services because not paying may lower your credit rating.
• Make a partial payment on the debt.
In some states, if you pay any amount on a time-barred debt or even promise to pay, the debt is ‘revived.’ This means the clock resets and a new statute of limitations period begins. It also often means the collector can sue you to collect the full amount of the debt, which may include additional interest and fees.
• Pay off the debt.
Even though the collector may not be able to sue you, you may decide to pay off the debt. Some collectors may be willing to accept less than the amount you owe to settle the debt, either in one large payment or a series of small ones. Make sure you get a signed form or letter from the collector before you make any payment. This document should state that the entire debt is being settled and that the amount to be paid will release you from any further obligation. Without this document, the amount paid may be treated as a partial payment on the debt, instead of a complete payment. Keep a record of the payments you make to pay off the debt.
What should I do if I’m sued for a time-barred debt?
Defend yourself in court. If you’re sued to collect on a time-barred debt, pay attention, and respond. Consider talking to an attorney. You or your attorney should tell the judge that the debt is time-barred and, as proof, provide a copy of the verification from the collector or any information you have that shows the date of your last payment. The lawsuit will be dismissed if the judge decides the debt is time-barred.
In any case, don’t ignore the lawsuit. If you do, the collector likely will get a court judgment against you, and possibly take money from your paycheck, bank account, or tax refund.
You are always free to assert your FDCPA rights.
• It’s against the law for a collector to sue you or threaten to sue you on a time-barred debt.
(Emphasis added to underscore the importance of this fundamental right). If you think a collector has broken the law, file a complaint with the FTC and your state Attorney General, and consider talking to an attorney about bringing your own private action against the collector for violating the FDCPA.
We’ve reported on some sobering facts that come directly from public website of the Consumer Financial Protection Bureau, the official agency of the U.S. government which is responsible for consumer protection in anything to do with financial matters:
Across the country, we continue to hear about serious problems with debt collection – debiting accounts without authorization, excessive and harassing phone calls, calling at all hours of the day or night, threats of arrest or criminal prosecution, threats of physical harm to consumers.
In the United States today, debt collection is a $13.7 billion industry. We handle more complaints about debt collection than about any other financial product or service, and the numbers keep growing.
• We estimate that about one in three consumers, more than 70 million people, were contacted by a creditor or collector seeking to collect a debt within the past year.
• We have handled about 250,000 debt collection complaints since 2011 and have handled about 85,000 in 2015 alone.
• We have ordered creditors and debt collectors to refund hundreds of millions of dollars through our enforcement actions against unlawful debt collection practices since 2011
The largest segment of complaints we have received had to do with continued attempts to collect a debt that the consumer said was improper, because it was not their debt in the first place or because it had already been repaid or discharged in bankruptcy.
Says Credit-Letters.com: In our opinion, this action is long overdue. This will definitely help anyone struggling to deal with debt collection agents who cross the line, and send out credit letters month after month to clean up their own credit problems. Let’s hope these proposals gain some teeth and traction, and eventually clean up the scumballs in the credit collection industry.
Simple techniques to get debt collection agencies off your back, and tips to protect yourself and your family from overzealous bill collectors. Gain peace of mind by learning your rights. Complete with U.S. debt collection laws and helpful links to websites offering free information to help you fight back when you are confronted with harassment from debt collectors.