How much can a collection agency do?

Question

I've heard conflicting things. I've heard that they don't have any legal authority and can't collect a cent unless you voluntairly pay. I've also heard they can sue you. What happens if/after you send the cease communication letter? Can they still go after you.

Sanjones you can tell them to stop contacting at work and entirly with the cease commuinication letter. This guys site is/was a big help:

http://www.budhibbs.com/

Answer 1

They can only keep sending you letters about the money you owe and put this as a negative on your credit report which will bring your score low, that's pretty much the only things they can do.

Answer 2

They will tell all sorts of lies and use all sorts of tricks to play on your ignorance. Knowledge is your best weapon. I've heard stories of collections agents telling people that they would kick them out of their homes in the next day or week or whatever. The only way they can kick you out of your house is through a formal eviction process and the only way they can do that is if a judgement has been granted and the asset has been attached.

If collections agents are harassing you, under the Federal Fair Debt Collection Practices Act you have the right to send them a notification requesting them to cease and desist all further communications with you. If they violate such an order I believe that you can then sue them under the provisions of the act.

Collections agencies can't take anything from you without a court order or judgement. So if one has not been granted and an agent is threatening you then its likely a toothless threat. Please keep in mind that if a judgement has been granted, they can take certain types of assets (though I believe there is an exclusion for personal items) and garnish wages.

The other thing to look into is the statute of limitations. Depending on what kind of debt it is (secured, unsecured, etc) and what state you are in, the statute of limitations could expire after a few years and at that point all their legal remedies are no longer applicable.

Regarding the credit report, yes they will mess up your credit report and score. The good news if you can call it that is that 7 years after the last consumer based transaction, the bad debt account will fall off your report. Some collections agencies may try to re-report the debt based on the last time the debt was sold or written off, but the law in most states is that its from the last time you did something (i.e. made a payment or other transaction). If they do a trick like this you should petition the reporting agencies to correct the mistake. Finally, if your situation is particularly stressful or problematic, you may want to consider professional assistance from an attorney.

If the creditors won't leave you alone and the threat of lawsuits doesn't back them off, you can always do a few little tricks to keep things at a distance such as make sure your phone number is unpublished and don't give out that number to anyone you don't know (such as cable and other utilities which share information) and get your mail at a p.o. box or mailbox place.

The ultimate solution of course is to either pay your debt or to work something out. Many collections agencies buy debt for pennies on the dollar, so they may be willing to settle for a small fraction of the outstanding debt. You don't know unless you negotiate. Also there are non profit organizations like Consumer Credit Counseling Services that can help negotiate plans as well. Be careful though because not all credit counseling services are legit and there are some nightmare stories about some flyby night operations.

Answer 3

I'm going through this terrible nightmare right now. I bought a motorcycle, I lost my job and I decided to turned it in, in another words REPOSSESSION. They were calling me everyday and I changed my home and cell phone number. But they found out where I work and now they are calling me at work saying that they are going to sue if I don't pay the debt off. I live in Texas and they can't garnish my paycheck but I'm afraid they can garnish my bank account. I don't make that much either but I just can't pay right now $10,000.00 dollars!

if anybody has actually been sue can you please let me know exactly what could happen?

Answer 4

Probably not, but they can sure F-up your credit! The original creditor can certainly sue you, and collect costs for having t hire a collection agency. If you still don't pay, the original creditor can do real cute stuff, like put a lein on your home.

Answer 5

They will keep contacting you for payment. Sometimes they sell your account to another agency and you will have a period where no one contacts you. Depending on what you owe they can garnish your bank account or paycheck eventually.