Posts Tagged ‘creditor’

Debtor collectors have now turned to social media outlets such as Facebook, Twitter, MySpace, Friendster, LinkedIn, and other various social media web-sites to collect information on debtors.  There have also been reports in the media of debt collectors sending messages to Debtors, as well as their friends, family, and colleagues, through these social media sites.

These debt collectors are searching these social media sites for information on debtors, such as employment information, current residence, friends and family information, aliases, and nicknames.  This information can be used to help track down Debtors for collection purposes. They are also attempting to relay messages to Debtors through friends, family, and colleagues asking the Debtors to contact to collector at a specified phone number.

One way to avoid the use of social media against you is to closely monitor and manage your privacy settings.  Make sure that the details of your profile are not viewable by search engine or on the social media site itself. Also, closely monitor and screen who is attempting to connect to your social network.  Finally, reconsider the information that your publishing on the Internet.  It is nearly impossible to control that information once you send it into the Web.

Your lenders will generally “write off” a delinquent account as a bad debt after 180 days, or six months. Most lenders attempt to collect their debts for a period of 180 days, and then, after that period,  issue a “charge off.”  This action is reported to the consumer reporting agencies (such as Experian) and will appear as a “charge off” or as “collection” on your credit report.

A “charge off” means that your delinquent debt was sold and/or transferred for collection purposes to a third party.   In all likelihood, after your debts are charged off, you will remain legally responsible for repaying the debt.  In other words, your debt is a contract to repay money, and those rights may be sold, assigned, and transferred to a third party. Some of the large credit card companies use collection agencies to collect their debts.  Here, credit issuers prefer to outsource their collections to aggressive third party agencies who take the risk and rewards in collecting delinquent debts.  In the alternative, many companies and debt collectors are active in the delinquent consumer debt market, and purchase delinquent debt from credit card companies. In these cases, your debt is sold to these companies for a fraction of its full value.

In either instance you have a right to request that the original creditor or new account owner provide documentation that verifies the debt.  You have a right to request a record of assignment and transfer if your debt was sold to a third party.  You also have the right to request an account statement that provides a breakdown of the principal and interest owed, as well as a statement of all credits made to your account. For more information, see the Fair Debt Collection Practices Act, 15 USC s. 1692(g) for the Federal statutes concerning the validation of debts.

If you are considering paying debts that are now owned by a third party, keep in mind that paying off those debts may not improve your FICO credit score. The most important factor that weighs upon your credit score is what the original creditor reports to the consumer reporting agency. This report is weighed upon much more heavily than what is reported by a debt collector or third party assignee of a debt.  In other words, paying off collections accounts does not improve your FICO credit score.

If you owe money to a creditor and do not timely pay your debts, or are delinquent, you will inevitably receive telephone calls from your creditors or debt collectors. Numerous clients of Grantham Cencarik, P.C. have protested to their bankruptcy attorneys that many creditors call their cell, home and business telephone anywhere between 5-6 times per day. This rule typically applies to each creditor. Because you are required to provide updated telephone numbers to your creditors, and telephone numbers are easily discoverable, your creditors and collectors consider your telephone line “fair game” during the collection process.

What can you do to stop calls from creditors and collectors?

If you have already filed bankruptcy, the automatic stay, 11 U.S.C. s. 362, prohibits all of creditors and collectors from contacting you for the purposes of collecting a debt. Once you bankruptcy petitions has been filed, your creditors and the collectors will be notified of the case filing, and the calls will gradually terminate. If one of your creditors contacts you after your petition has been filed, provide them with your case number and that you have filed for bankruptcy in the District of Massachusetts. This should put an immediate end to collection calls.

If you have not yet filed for bankruptcy, are in the middle of the bankruptcy process, or still deciding whether to file for bankruptcy, there are actions that you can take to eliminate off collection telephone calls. Pursuant to the Fair Debt Collection Practices Act, your creditors must cease and desist debt collection communications if you notify them in writing that you do not wish to be contacted. The next time you receive a call you should answer it. Then, ask the caller which account they are calling in reference to; as well as the name, address and fax number of the caller (collection agent). Make sure to include all this information on your letter that instructs the collector not to contact you. If you are receiving calls at work, make sure to inform them not to call you at work or that your employer does not permit such calls to be made to your place of employment. Make sure to fax and mail this letter to the collector.

Keep in mind though, that just because your creditors are no longer calling you; they have not stopped collection of your account. Usually, your creditor’s next step will be to sue you for the money you owe them. Once they get a judgment against you, then your creditor has new powers to make you pay, such as seizing a vehicle, garnishing your wages, or forcing you to come to court on a monthly basis. The only way to stop your creditors is to either pay them, or to file bankruptcy. For more information, contact us by calling 1-888-5-BOSTON, or 617-497-7141.