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How To Stop Collection Calls

Being saddled with overwhelming debt can create undue stress and anxiety on you and your family. This is especially true if you are receiving collection calls and/or letters. For some, it can get to the point where you don’t answer your phone or check your mail. When collection letters start stacking up and the calls are never ending, it is important to know your options. Getting the calls and letters to stop will give you some much needed peace and can even give you a chance to catch your breath so you can come up with a plan to handle the debt.

Debt collectors are required to follow certain laws when attempting to collect a debt. If you are being called by a collection agency, here are some ways you can put an end to those calls:

 

● Advise the caller you are requesting a cease and desist, then follow up this verbal command with written correspondence.

● Request the agency prove the debt, in writing, to you.

● Ask for confirmation of the name of the original creditor and to be provided a copy of the documents the collection agency claims created the debt.

These are effective techniques that will put a stop to collection calls and letters. However, these remedies offer only temporary relief. For a permanent stop to the calls you should turn the matter over to a skilled attorney. We will review your case and provide you options to alleviate the debt you have, and will also field all the collections calls you are receiving. Whether by bankruptcy, negotiation for repayment of a lesser amount, or other work out options, we can help you get back on your financial feet. Getting your finances in order helps to give you a positive outlook for the future, let us help you get back on track.

If you are receiving debt collection calls or letters, let an experienced attorney help you. We fight to protect your rights and stop the collection calls. Call a Plantation, Florida debt relief attorney today for more information.

 

 

Phantom Debt or Zombie Debt

These names may be foreign to some, but the companies that operate within their confines are not. If you (or someone you know) have ever been subjected to debt collectors, then you probably are well aware of who phantom or zombie debt collectors are. According to a report issued by CNN in July 29, 2014 one in three Americans are now dealing with debt collectors.

Types of Debt Collectors

Debt collection practices fall into three major categories – house accounts, collection agencies or debt purchasers. With house accounts, employees of the company (their representatives) are tasked with collecting past due debt. Their goal is to resolve and collect outstanding balances before a debt becomes too old (typically six-months) and is written-off as uncollectible. Once the debt is written-off, it is usually sent to an outside collection company that is tasked with collecting the outstanding balance. In most cases (but not all), the collection agency gets a percentage of any monies they collect, some get upwards of 50% of all the money they collect. The last category of debt collectors are debt purchasers. These collection companies buy old debt that is no longer being worked by the original creditor or an external collection company. In most cases, the debt has aged substantially (often three or more years since the debtor defaulted).

How the Phantom/Zombie Debt Works

The reason it is called phantom or zombie debt is that these old debts tend to arise from the dead or are not owed or belongs to someone else – like someone with the same name or a deceased child or parent. After years of not hearing about an old debt, suddenly and out of nowhere, a letter or phone call comes from ABC, XYZ, (or whatever) Asset Management Fund (Company, LLC, etc.). The letter will state that they are attempting to collect on the debt owed to “such and such” company. They will lead you to believe that they are a debt collector working for the original creditor. However, this is not true.

The truth is they have purchased the debt from the original creditor or a collection agency (one that has given up on collecting the debt) for mere pennies on the dollar. They might have purchased your old debt that was originally $1,000 for as little as .50 cents. In the extreme, they may have spent several dollars for the debt. The asset purchase companies relish buying this debt for two reasons – it is a fraction of the original cost and with cumulative interest added it is now worth many times more than the original amount you owed the creditor.

Why the Misrepresentation?

Most (if not all) of these asset purchase buyers want you to think that they are representing the original creditor and that they are going to make you an exceptional, but limited time offer. They try to convince you that you can finally settle this debt and put it behind you. They hope that you, the debtor, is ignorant of zombie debt collectors and will easily fold to their demands and antics.

If they were honest and forthright and explained that they purchased the debt for pennies on the dollar, they would lose their ability to extort monies from you using deception. The asset purchase model is so lucrative that if only a small percentage of accounts paid up, the profits become staggering. One of the leaders in “debt asset purchasing” claims the retail value of their portfolio is over a billion dollars – are you starting to see the picture.

Consumer Rights and Protection

As with all debt collection, there are laws, regulations, and practices, which govern and provide protection for debtors. Unfortunately, overzealous collectors sometimes (all too frequently) go beyond what the law allows in attempting to collect a debt. In some cases, a collector may have violated federal law and could be subject to fines/penalties or both. It is important for a consumer to understand their rights and to seek the help of legal counsel when these rights are violated.

The next blog will detail the rights of consumers, and the standards that creditors and collection agencies are expected to adhere as defined in the Fair Debt Collection Practices Act.

If you are having problems with debt or debt collectors, Dzousa Legal is here to help you. We will gladly meet with you to discuss your options. The initial review of your matters is without obligation or fees.

Should I File for Bankruptcy Protection now or wait until a later date?

Clients frequently ask that question of Dsouza and Strachan Lawgroup. However, the answer depends upon many factors, and each individual’s legal situation is different; as such, we review the facts on a case-by-case basis.

A bankruptcy filed too early could result in the loss of property, which otherwise might have been retained. A determination needs to be made regarding which Chapter of the bankruptcy code would serve the debtor best. In some cases, it might be more preferable to file a Chapter 13 versus a Chapter 7. It is possible that seeking protection from creditors using the provisions of the federal bankruptcy code will not be the best solution. There are other remedies available instead of filing for bankruptcy protection.

Mortgage Modification or Bankruptcy

A strategy we are finding among some individuals facing foreclosure is to file bankruptcy. Although this can be a good strategy, it can also work against the borrower if done at the wrong time. The timing in filing for bankruptcy protection is critical, as typically, new lenders will not enter into underwriting a mortgage before the bankruptcy is discharged. In addition, in bankruptcy, the promissory note portion of the loan is cancelled, but not the lien.
As such, the borrower loses a negotiating tool. A straight modification may prove to be a better option than bankruptcy in bringing down mortgage payments. A qualified attorney should be consulted before making any decisions regarding bankruptcy or loan modification.

Chapter 7 versus Chapter 13

In determining the type of bankruptcy to file, the debtor will be subject to a “means test.” The test is used to determine if the debts can be paid off (typically a portion of the debts) using a structured repayment plan. Although the filer may want to discharge all their debts using the Chapter 7 provision of the bankruptcy code, they may not be eligible because their income for the past six months has been too high. Everyone’s circumstances are different and unique. It is important to consult an attorney who specializes in the handling of bankruptcies to receive the best advice.

New Debt Coming

If the candidate for bankruptcy knows that new and significant debt is in the near future, it would be wise to hold off on filing. Typically, a Chapter 7 bankruptcy only eliminates the debt you owe as of the filing date. Debts incurred after the filing date would be the debtors responsibility to pay. There are times when a bankruptcy case can be reopened to include debts that were not part of the original filing. However, it can be costly and whether the debts can be discharged will depend upon qualifying circumstances.

Seeking Legal Advice

Consumer debt and laws that protect individuals (and businesses) are complex, vast, and comprehensive. The federal government has Constitutionally established a mechanism, which helps consumers get a fresh start. In addition to federal laws, each state has provisions, which specifies how personal property and assets are treated and protected. Consumers should understand their rights regarding their property. It is to the advantage of all consumers to understand what creditors (including collection agencies) can “say” or “do.”