Credit card obligations, medical bills, car payments – the number of financial commitments tend to increase with the passage of time. When you do not payback on time or if you have been foundering on your monthly dues, this is where the debt collectors come in the picture. Debt collection activity takes place when the debt collectors collect debts from businesses or consumers that are bound to pay/repay the money they owe. Debt collections comprise of collection agencies or lawyers that collect debts as a part of their business. It is generally convenient and cost-effective for businesses to recruit professional debt collection companies than wasting their own time and resources to follow-up on pending dues on delinquent accounts.
If you have not paid a bill on time, the creditor is bound to initiate the debt collection process. The service may give remainders by calling or sending letters. The bill collector service is actually doing this to ensure if you intend to pay back or not. Oftentimes, they may get in touch with you to offer convenient payment plans wherein the owed money can be easily paid back in smaller amounts. However, some creditors perhaps only be interested in recovering their funds immediately. This all mainly depends on the contract you have had with the creditor.
After repeated calls and emails if you have not responded, then the bill collector may try a stricter approach. As your debt is 30 or 60 days past due, they may report the case to any major credit bureau. This can damage your credit standing. Poor credit makes it harder for you to acquire a loan. If you have not paid for 90 days, the creditor may choose recruitment debt collections agency to collect the owed money. A debt collection service generally works for a fee.
Though this is the responsibility of a debt collector, you should know that you enjoy certain rights throughout this process. The Fair Debt Collection Practices prohibits debt collectors from using abusive practices or words to obtain debt from you. They are not supposed to discuss the matter with a third party, besides a lawyer or spouse. The bill collector must not make misleading or false statements. The service cannot capture your property unless they have filed a suit against you. In case you face any such issues from debt collection agencies, you can always report the matter to your state's Attorney General's office.