Articles Posted in Debt Collection & Lawsuit Defense

If you are overwhelmed with medical expenses, you are not alone. I read an article recently where it stated that medical bills and accounts now represent over 50% of debt classified as being in collections status.   That’s huge!  According to the Federal Reserve, the government agency that keeps up with these things about 1 in 6 credit reports have medical debt collection accounts listed.  About 40% of these credit reports were also experiencing a lower credit score and the majority of these debts were listed as still unpaid.

There are two major issues.  One – people are struggling with the amount of medical debt that they are in – there isn’t a payment plan out there that would be feasible for them to attempt.   And two – people are struggling with somewhat manageable medical debt but the medical collections community seems to have absolutely NO desire to work with them on any type of reasonable payment plan.

I met with a couple the other day that make good money and had health insurance.  The husband recently had to undergo surgery and the bills were steadily coming in from the doctors, labs, and the hospital – but overall it wasn’t too bad.  The problem is that they all wanted their money immediately.  Pay or be sent to collections in 30 days. Pay the debt collector or be sued.  Be sued and be garnished or have your bank account frozen.

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FTC logo      If you are getting debt collection calls you are not alone. About one in seven people in Mississippi is being hounded by a debt collector. Buying debt and debt collection is a billion dollar business and becoming a larger, more complex industry. The original creditor sells their debt to a debt collector, and often they sell the same debt multiple times meaning that multiple debt collection companies are attempting to collect the same debt! Debt collectors often attempt to collect from the wrong person, overstate or inflate the amount owed by adding collection fees, and even attempt to collect debts that are not real (may have been paid in the past or was never a debt to begin with).
Along with these abuses, details of the original debt are lost or outdated. Creditors selling debt are basically selling lists that have contact information and amounts owed – and little more than that in way of details.  Collectors then may have a mixture of valid debts, debts that have been since settled, or debts that are past the statute of limitations and can no longer be collected. It’s not clear exactly how many consumers are wrongly harassed for accounts that are not their debt. Debts purchased by the large debt-buying firms have no documents, contracts or other proof of the debt. Your debt will be sold to a debt collector for pennies on the dollar. It’s not just the original credit that sells debt.  Debt collection companies then may sell the lists they have purchased to other debt collectors, who may then sell it to another, then another, and another. It’s not uncommon for people to all of a sudden be receiving debt collection calls and letters about something that happened years ago but now, the debt has shown up on a list that has been sold to another company, and here we go again. Continue reading

stop calls      First realize that you do not have to talk with the debt collectors when they call. They are not calling because they care about your situation or want to discuss your financial problems in order to help you find a solution. They want a payment, or a promise to pay, and unless you are able to give one of these things to them, there is no reason to talk. If you had the money, you would have already paid them, and if you had the money coming in, you would have already made arrangements (a promise) to pay.  They know this so they call, and call, and call, and call – thinking that the more they harass you, belittle you, etc – the more likely you are to figure out a way to pay them – they don’t care about you being able to figure out an overall solution, just that you meet their immediate demand regardless of the cost to you.  Who gets fed? Usually it’s the loudest chirping bird.  Debt collectors don’t care if all you have is the money to pay your house note – they want to be paid and the house note not getting the money is your problem. You don’t have to talk to people like this.
Keep in mind that a debt collector is required to mail you what’s called a “validation” notice within five days of first contacting you. This notice must include and lay out the amount they claim owe, the name of the creditor that they claim you owe, and what to do if you think you don’t owe this money. You then have 30 days to dispute this debt and it’s claims. You also have the right to notify them that you do not want them to call or contact you anymore. It is best that you do this in writing and send it by certified mail so you have proof of your notification to them to stop contacting you, should they continue to call.  Click here to read more about stopping debt collectors from calling.

Secured creditors are creditors that have some type of property (ie. security) or collateral for the loan you owe. They have a lien on your property, which is an interest in property that allows a creditor to repossess that property if you don’t pay.  Your mortgage company has your house as security for the mortgage loan.  The auto finance company has your vehicle as security for the auto loan.  The local finance company may have some of your furniture and household goods as security for the money they loaned you.  These are all secured creditors.

Unsecured creditors are creditors who you owe money to, but they do not have the right to repossess anything if you don’t pay them.  Credit cards, medical bills, signature loans, payday loans are some examples of unsecured debts.

If you are being sued by a creditor and you don’t show up for court, the debt collector wins, right or wrong – they win and get a judgment against you. With a judgment the debt collector has the power to garnish your wages or seize your bank account, or any bank account with your name on it.

Don not ignore a summons or copy of a lawsuit if you are served with one. Contact a lawyer early on to find out what your options are. Knowing what steps to take and having the information to decide what is best for you is the most important thing to know. Dealing with any legal action can be overwhelming. It is crucial to speak with a lawyer regarding the options that exist for you.

Yes, you can stop debt collectors from calling you. Federal law, the Fair Debt Collection Practices Act, (“FDCPA”) requires debt collectors to stop calling if you send them a written request. Once your written notice for telephone calls to stop has been received by a debt collector, financial penalties of $500 to $1,500 can be awarded per violation.

What You Need To Do To Stop Debt Collection Calls:

    1. Write a letter setting out your name and address.

The Fair Debt Collection Practices Act (FDCPA) prohibits abusive and deceptive collection tactics. This means that the debt collectors cannot insult you, threaten you, trick you, lie to you, or harass you with phone calls at all hours. This law applies only to third-party debt collectors and does not apply to a creditor collecting their own debt.
If you feel you a debt collector is being abusive, you can sue them under the FDCPA. Mississippi has zero consumer protection laws and there is no regulation of debt collectors. Creditors collecting their own debts are free to abuse you in Mississippi. You can complain to the state attorney general’s office if it makes you feel better, but don’t expect anything to come out of it.  But you can stop the calls – click here to find out how. And you have options on how to deal with your debt overall – I can help.

The federal Fair Credit Reporting Act (FCRA) was created to promote accurate, fair, and private filing of information by consumer reporting agencies.  There are many types of consumer reporting agencies, including credit bureaus and specialty agencies (those that sell information about check writing history, medical records, rental history, etc).  Most familiar to everyone are the 3 national credit bureaus: Experian, Equifax, and TransUnion. Here is a summary of consumer’s major rights under the FCRA:

  1. You must be told if information in your file has been used against you.
  2. You have the right to know what is in your file.

Most of my clients come to me after a garnishment has been sent to their job. A few come to see me as soon as they are served with the lawsuit.  I wish they would come to see me on the day they get sued, but that is not always practical.

If you get sued or served with papers trying to collect a debt there are several things you can do.

1) Ignore everything and hope it goes away.

I have been flooded with inquiries from people in the Jackson, Pearl, Brandon, and Madison cities of the metropolitan area who have been scared to death by collection agencies.  The caller usually claims to be a detective or some sort of officer and states that they are on their way to your house to take you into custody unless you pay your balance in full immediately.  They state they must have the payment over the phone – no option to mail in a payment, etc.  This is all a ruse to gain entry into your bank accounts.
People, listen up. YOU DO NOT GO TO JAIL FOR FAILURE TO PAY AN ORDINARY DEBT.  Don’t be scared by these tactics. It’s simply lies to get you to hand over money.  Do not give them any details about yourself.  They may have some info about you and even the name of a company you owe, etc but even if you are indebted to the company, it is illegal for bill collectors and collection agencies to threaten you with possible arrest. You can go to jail for not paying child support or court fines but not for regular and ordinary debts.