Debt collectors often resort to unreasonable, and illegal, means to seek payments from consumers. Regardless of their unscrupulous actions, you have the last say in how you manage debt. A Los Angeles bankruptcy attorney can determine whether the debt collector is being fair and can provide solutions to help pay off your debt.
When a debt collector calls, there are many reasons to investigate why. Here are some tips on what you can do:
1. Exercise Your Rights
In 2016, the Consumer Financial Protection Bureau (CFPB) received tens of thousands of complaints by people asked to pay debt that wasn’t theirs. First, ask the debt collector for a validation letter, then put together your own records, including history of payments and communications with the collector. If you file a dispute within 30 days of first contact, the collector must wait until it’s settled to request payment.
2. Always Get It in Writing
If a collector claims you owe money, they must send a written statement per the Fair Debt Collection Practices Act (FDCPA). This document states what you owe, the name of the original creditor, and what to do if any information is wrong. Also document every phone call, written correspondence, and voice mail. Therefore, proof is available should the collector break the law. If this happens make sure you contact our Los Angeles & Orange County bankruptcy attorney’s help.
Debt collectors are often willing to negotiate, as they’re looking for whatever they can get. They often purchase debt for a fraction of what it is worth. You might be able to start with 10% of what you owe, but settle for around 30% to 50%. Don’t pay unless you get the agreement in writing, and never allow a collector to access your bank account.
4. Don’t Ignore the Debt
A debt collector may seem out of line but ignoring their calls won’t help. You can find yourself with a debt collection account. That means more phone calls and a spot on your credit report. However, an erroneous account or error on a legit one can be disputed—only an accurate report, balance, and payment status on a credit report matters, so be diligent in assessing information you find.
5. Hire a Lawyer
You may be entitled to a free consultation, especially if your attorney believes the collector has violated the law. For the most part, debt collectors can’t contact you if your attorney is handling your debts. You can also complain to the CFPB if the debt collector has violated FDCPA guidelines.
Another option is bankruptcy; although it can harm your credit score, Chapter 7 bankruptcy helps get rid of personal debt, such as credit card debt and medical bills. Chapter 11 bankruptcy helps high net worth individuals and businesses reorganize and repay debt and protect assets.