Debt Consolidation Credit Counseling In Phoenix

Regrettably debt collectors are often less than ethical. This has caused the government to pass legislation to protect you from unethical debt collection tactics.

If the debt they are contacting you about is accurate then you should ask for debt validation. This should be done in writing.

If you neglect to do this and ask for validation over the phone 99% of the time it will be completely ignored. Additionally send it certified mail so you have proof that they received your validation letter.

If your debt is validated by the creditor and is within the statute of limitations of your state, then you should negotiate payments. Statute of limitations are commonly seven years from the first date of delinquency.

When negotiating payment you should never pay the full amount. This is because your account has been purchased from the original creditor for pennies on the dollar. Thus we suggest you start your offer at 50% of the balance.

The agencies will always accept partial payment. This is because there only way to recoup the money they spent on your account is by accepting your payment or selling it for a fraction of what they paid for it to another agency.

When you agree on a settlement payment you should get in writing from them that in exchange for your payment they will not report any derogatory information to the bureaus. If you do not do this you will stop the phone calls, but you will have a whole new set of problems because of a poor credit score.

Also if you just pay the debt it will be reported as a paid collection. This is still a very bad mark on your credit report and will not improve your score.

Again, you must get in writing that negative information is not going to be posted to your report regarding the debt. Occasionally that negative information has already been reported you must get them to agree to remove it from your report.

If you do not do this you will not benefit from paying the collection. Also always pay with a paper check and no other form. Just so you know you can actually use the memo line to repeat the agreed upon contract, when the check is cashed you will have a binding contract.

If you are being harassed by an agency you are not alone. Also they only can legally take so many steps to collect.. The Fair Debt Collections Practices Act says that a debt collector can not;

- Threaten arrest or jail

- Harass you with calls

- Call your place of employment (once asked not to)

- Claim to be anyone they are not

- Threaten a lawsuit (unless they are taking legal action)

- Threaten to garnish wages or seize property (each state is specific about what is legal, often a court order is needed)

- Call your friends or family members and speak with them about your debt

- Only call between 8am and 9 pm

- Call you after you have notified them that you will not accept calls regarding this debt.

Unfortunately these regulations are often ignored. If you have been a victim you should report the agency to the FTC and the Attorney General. Many collection agencies have been fined because of violation of the FDCPA.

Additionally you can file a lawsuit against the agency and be awarded monetary damages. Make sure to keep all communications in writing in case they are in violation.