When you’re struggling with debt, your phone rings a lot. Your mailbox is full. You may even be receiving emails and texts encouraging you to make contact, make payment, or make payment arrangements. It’s stressful and discouraging. No one likes falling behind, worrying about legal action, and fielding all those calls. Sometimes it seems that debt collectors believe if they call you often enough, money will magically appear in your bank account.
With all that going on, it’s natural to want to turn off the ringer, toss those notices in the recycling bin and go on with your life. But, it’s not the best approach–even if you don’t have the money they’re looking for. Here’s why:
- 1. Potential Payment Arrangements or Other Accommodations
- 2. You Have Rights Under the FDCPA
- 3. Debt Collectors Can Employ Dishonest and Abusive Practices
- 4. It Can be a Warning of Upcoming Actions
- 5. Debt Collectors Don’t Want You to Show up in Court
- Reclaim Control with the Help of an Experienced Attorney
1. Potential Payment Arrangements or Other Accommodations
You may be surprised by the payment arrangements or other accommodations you’re offered. If the debt is still with the original creditor, they may allow you to skip a payment or two, eliminate late fees or make other short-term changes to help you get back on track.
But, if you wait too long and the debt goes to collections, you may lose those options. Similarly, a debt buyer may make you a very favorable payoff offer, since they’ve likely purchased the debt for pennies on the dollar. But, those offers typically have expiration dates.
2. You Have Rights Under the FDCPA
You’ll want to exercise your rights under the Fair Debt Collection Practices Act (FDCPA). This federal law governs the actions of third-party collectors like collection agencies and debt buyers. One obligation the law places on collectors is that they validate a debt before continuing collection activity or reporting to credit bureaus.
But, that obligation only kicks in if you dispute the debt. While you can dispute the debt at any time, you get extra protection if you dispute within 30 days. So, opening those collection notices and letters promptly helps preserve your rights.
3. Debt Collectors Can Employ Dishonest and Abusive Practices
The FDCPA also protects consumers against certain dishonest and abusive practices by debt collectors. You probably won’t be surprised to learn that some debt collectors break these rules–they don’t provide the required information in statements, or they generate documents that look like they’ve come from a government agency, or they threaten you on the phone even though they know they can’t take the actions they threaten.
FDCPA violations can give you leverage when negotiating with a debt collector, and serious violations may even entitle you to money damages. But, you won’t be able to identify most violations unless you read their notices and answer their calls.
4. It Can be a Warning of Upcoming Actions
Sometimes those notices warn of upcoming actions you’ll want to avoid, and even provide a specific time frame in which you must act to avoid those actions. Depending on the type of debt and where in the process your debt is, those actions may include repossession, foreclosure, wage garnishment, and other events that can be seriously disruptive.
If you’re unable to take preventative action by making a payment (or whatever action they’re demanding), this type of notice may be the signal that it’s time to consider a longer-term solution, such as bankruptcy.
5. Debt Collectors Don’t Want You to Show up in Court
You may be thinking that’s fine, because you don’t want to show up in court, either. But, there’s a reason the debt collector wants you to ignore the summons, fail to file an answer, and stay home: if you show up, you might win.
Debt buyers, in particular, are often poorly prepared to prove their claims, and may not even have access to the necessary documents. But, if you don’t respond within the allotted time or don’t show up in court, the judge will usually enter a default judgment in favor of the plaintiff.
Reclaim Control with the Help of an Experienced Attorney
In short, the only way to build a better financial foundation is to reclaim control. And, you can’t do that effectively without information. That means understanding exactly who is billing you and for what, whether the amount owed is accurate, what options they have offered, and whether they have followed the procedures required by law in attempting to collect the debt.
It also means educating yourself about your rights and options, from understanding how debt collection lawsuits work and what’s required of you to exploring your options for resolving debt. Those options may seem as overwhelming as debt collector communications, as you’re bombarded with online advertising, radio pitches, maybe even email or mail solicitations offering solutions that often sound too good to be true.
A consultation with an experienced Los Angeles bankruptcy lawyer may be the best first step. At Borowitz & Clark, we’ve been helping people get out of debt for decades, and have served more than 40,000 clients. We’re familiar with the shady tactics some debt collectors use, know how collection agents and debt buyers use default judgments to increase their collection options, and know how to negotiate with creditors and debt collectors. We can also explain how Chapter 7 and Chapter 13 bankruptcy work, and help assess whether one of those options might be the solution for you.
The consultation is free and there’s no obligation, so there’s no downside to educating yourself. You can schedule your consultation right now by calling 877-439-9717 or filling out the contact form on this page.
Barry Edward Borowitz is the founding partner of Borowitz & Clark, LLP, a leading bankruptcy law firm that represents clients petitioning for bankruptcy protection under Chapter 7 and Chapter 13 of the bankruptcy code. Mr. Borowitz has been practicing bankruptcy law exclusively for more than 15 years. View his full profile here.