7 Common Questions and Answers You Need to Know
Debt collectors are teams that pursue the repayment of debts that have gone into collections. These are old debts that are still unpaid, in some cases they have passed beyond the statute of limitations where the debts legally need to be repaid.
Some debt collectors can be difficult to deal with, but if you know how to navigate the situation, you can retake control of your finances and even use their business model to your advantage.
Here are the answers you need to seven common questions about debt collectors.
Here is what you Need to Know
- 1. What does a debt collector do?
A debt collection agency is a private business that buys debt from other companies. Debt collectors from the agency then pursue the debts, seeking repayment. Unlike original creditors, achieving debt repayment is their only goal. Debts are the business’ source of income and they will use all the resources of the business to try to get the debt-holders to pay.
Debt collectors can make phonecalls, mail letters, send emails, and make repayment offers. They are also governed by the Fair Debt Collection Practices Act (FDCPA) in how they conduct debt collection procedures.
- 2. How long does a debt collector have to collect?
Debt collectors have until the end of the debt’s statute of limitations to collect or sue. While debts are typically removable from your credit report after 7 years according to the credit bureaus, state law determines a debt’s statute of limitations.
The statute of limitations varies by state and type of debt. For example, the statute of limitations in California for 2 years for oral contracts, and 4 years for written contracts, promisory notes, and open-ended debts.
However in Louisiana, the statute of limitations os 10 years for oral , written, and promisory debts and 3 years for open-ended debts. Debt beyond the statute of limitations is expired or zombie debt.
This chart can help you identify the statute of limitations for debts in your state.
- 3. Can a debt collector sue you?
In some cases, debt collectors can sue you with the intent of getting your debt repayment ordered by the court. However, their ability (and even willingness) to sue is limited by certain factors.
- They cannot threaten to sue you without intent and legal ability to sue.
- They cannot sue you for expired/zombie debt
- Often, debt collectors won't really sue over small amounts of money, because suing costs them money.
- If a debt collector successfully sues you, your repayment will be legally mandated and cannot expire.
- 4. Can a debt collector garnish your wages?
Debt collectors can only garnish your wages if they have already successfully sued you. A debt collector cannot simply start garnishing your wages, they must first win a debt collection lawsuit.
- 5. Should I give a debt collector my personal info?
No. Debt collectors already have the information in your debt file. It is also important to remember that scammers sometimes contact people in debt pretending to be debt collectors and may be asking for your information for criminal purposes under this guise.
- 6. Can I make debt collectors leave me alone?
Yes. There are steps you can take under the Fair Debt Collection Practices Act (FDCPA) where debt-holders can request peace and privacy.
- Officially request the debt collectors not contact you at work.
- Give debt collectors your lawyer's contact information and request they only contact your lawyer.
- Officially request no-contact or to stop being contacted by specific channels.
You can also report any collection agency that violates your rights, their legal behavior guidelines, or your privacy as a debt-holder.
- 7. Can I negotiate with debt collectors?
Yes. If you intend to pay the debt, negotiating can lead to a reduced total, lowered interest rate, or favorable replayment plan.
Many debt collection agencies are happy to negotiate if it means receiving some or most of your debt repayment, as this is their business’ source of revenue. Expert debt negotiators specialize in working with debt collection agencies to get better repayment deals.
- To Pay or Not to Pay Debt Collectors
If your debt is beyond the statute of limitations, you can take steps to not pay, have the debt removed from your records, and force debt collectors to stop contacting you. If you intend to pay the debt, negotiation is often the best route to more favorable repayment terms. Repaying your debts is the best route to a higher credit score, but whether you pay or not, you can take steps to stop any debt collection methods that are causing you stress.
Dealing with Debt Collectors with DebtBlue
DebtBlue specializes in helping people in debt seek the best path to debt resolution and financial freedom. If you are being stressed out by debt collectors, we can help you take the steps to stop unwanted contact, eliminate your expired debts, and negotiate the best repayment terms for the debts you plan to pay. Through personalized strategies, we will ensure that worrying about debt collectors becomes a thing of the past.
Contact us for a consultation about your situation.