What Debt Collectors Don’t Want You to Know – Part 2
Hopefully you have read our blog titled “What Debt Collectors Don’t Want You to Know – Part 1.” Below are a few more things collectors hope that you are not aware of:
Debts can expire
If a debt collector contacts you regarding an extremely old debt (sometimes called a “zombie debt”), it is important to understand that a “stale debt” is not collectible. The applicable state law provides a statute of limitations or the time period in which a creditor or collector must collect a debt before it becomes uncollectible. However, the law does not require the collector to inform you of whether or not they legally have the right to sue you to collect the debt. You should also understand that the statute of limitations usually begins to run from the date of your last payment. Thus, if you make a payment on an expired debt, it may be revived and become collectible again. Common targets for old debts are the elderly, victims of identity theft, or those with medical debts (the collector claims it should’ve been paid by the insurance company but wasn’t).
Collectors are under pressure too
Many collectors try to act like they have all the time in the world to collect from you, but most of them work on sliding scale commissions. This means that the longer it takes them to get you to pay, the less money they will make. As a result, it is sometimes beneficial to postpone paying the collector. You may be able to get a better settlement at the end of the month than at the beginning of one if the collector is attempting to meet a quota. Also, a collector may be willing to take a smaller lump sum payment instead of paying the full balance over time if they get their commission paid quicker.
Filing a lawsuit is usually necessary before collection tactics
If a debt collector is trying to get you to pay an unsecured debt – such as credit card or medical bills – they generally must file a lawsuit and obtain a judgment against you before they can garnish your wages or go after your property. A collector’s threats to take such actions before obtaining a judgment may be considered a violation of the FDCPA. Many debt collectors make threats they cannot legally cannot follow through on or that they have no intention of pursuing. Remember, collectors will use psychological tactics to convince you to pay a debt.
Contact our California Debtor Protection Law Firm with your questions, comments, and concerns, or for a free consultation. Speak to a CA credit card lawsuit and collection harassment lawyer at our firm today.