What Legal Action Can a Debt Collector Take

If they continue to try to collect from you, you can get help from state legal services by applying online to apply.slsct.org. If you are 60 or older, call the Consumer Rights Project for Elders at 1-800-296-1467 for free legal help. You can also talk to a private lawyer. If you`re worried about your debt, know that you have options you can explore to address your debt challenges. A powerful option for debt relief is bankruptcy. Bankruptcy can immediately deter a creditor from suing for unpaid debts. If debt relief is ordered in your bankruptcy, you will no longer be liable for your debts and all collection and judgment actions associated with those debts will be dropped. If you owe a debt to the government, for example: A tax bill, a student loan or an overpayment of government benefits, the rules are also different. The government may be able to seize your tax refund or deduct it from your state benefits (like your Social Security check) to pay off your debts without suing you. This is called lag. There are some restrictions on what the government can take. Contact your local legal aid agency for additional help with sovereign debt. Keep in mind that paying off old debt may not erase it from your credit history.

Even if you pay off the debt, some debt collectors will report it on your credit report to show that you haven`t paid the full amount. If you dispute only part of the invoice, the collection agency will not be able to collect that part until it verifies it against you. Since you are still responsible for the rest of the bill, you should consider making arrangements to pay the undisputed portion. Once a claim is time-barred, a collection agency can no longer sue you to collect it. In fact, it is illegal for a debt collector to sue you for failing to pay a prescribed debt. If you are sued for a prescribed debt, tell the judge that the limitation period has expired. Provide your account number and make a copy of the letter for your records. Once they receive your letter, a creditor is always allowed to contact you, but often they will stop.

A debt collection agency can only contact you to tell you what they will do next. For example, they may say they will sue you or stop communicating with you. Where can I report a debt collection agency for doing something illegal? If a judgment is rendered against you and you are served with a subpoena, you must still respond to it, even if you do not have anything the collector can take. If you are confident in the judgment, you may be able to negotiate a lower settlement with the debt collectors or see if they will cancel the debt. There may be tax implications on any debt that is written off. Can the debt collector ask me for a pre-dated cheque? There is no law preventing a collector from requesting or accepting a backdated cheque. However, some restrictions may apply. The collection agency is prohibited from asking you to present a pre-dated cheque «for the purpose of threatening or taking legal action.» This brochure explains your debt collection rights and reports any problems you have with a debt collection agency: in some cases, bankruptcy may be a good option for you. See the brochure Legal Aid: Thinking about bankruptcy? Is the process the same if I have multiple debts? If the same collection agency tries to collect multiple debts from you, the collection agent must provide separate notice for each debt. You must dispute each debt separately and the debt collector must provide separate validation information for each debt.

Can I be charged any additional fees? To determine if the collector is authorized to charge additional fees on your debts, consult your original contract. If you have agreed to pay a «collection fee», the collection agency may add reasonable costs such as attorneys` fees, court costs or credit reports. If the agency collects an NSF check, it can add collection and attorney fees, as permitted by state law. Your lawyer should be able to tell you how much the agency can legally charge you. You are also entitled to an explanation from the collection agency about how much they will charge you and why. You should ask them by letter to explain this to you in writing. Collectors can`t bother you. For example, Collector Re: Collection practices of: [Debt Collection Name and Address] Ignoring a lawsuit can make things more complicated for yourself. Once you ignore a collector`s claim long enough that you are past the date you are authorized to initiate a defense or resolve the issue, the creditor will receive a default judgment against you. A default judgment allows a creditor to recover money owed to them by garnishing your wages, attaching liens to your property, and/or debiting your bank accounts.

If you can`t afford to pay the full amount, send the amount you can afford each month, even if it says it`s enough. Making a payment each month can deter them from suing you for the full amount of debt. When asking about your debt, remember that in some states, if you confirm in writing that you owe the debt, the clock will reset and a new statute of limitations will begin. Some debts may be too old for debt collectors to receive a judgment against you. The New York statute of limitations (time limit) for debt collection is usually six years from the last payment you made. The timeframe can be longer or shorter, depending on the type of debt you have. If you make a payment for an old debt, the limitation period will be extended, even if the original limitation period had already expired. This means that the debt collector could sue you and get a judgment against a really old debt. What if I am not the person who owes the debt? If you are not the person looking for the debt collection agency, write the dispute letter above and explain the debt collection error. If you are unsure of your legal liability for a debt, consult a lawyer. If the collection agency is unable to obtain confirmation that you owe the debt, they may return your account to the creditor and stop collection efforts.

The Agency is not required to notify you if it does so. If the agency returns your account to the creditor, it can be transferred to another agency for collection. Many people are surprised to learn that debt collectors can sue debtors for the balance of the outstanding debt.

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