You are being squeezed between your current needs and the debts of the past.
Your creditor threatens to “send you to collections”.
The debt collector promises to call every 20 minutes until you pay.
The caller claims to be law enforcement with a warrant for your arrest for non-payment.
Welcome to the world of debt collectors.
Fundamental truths
Whether threatening or sympathetic, the debt collector has only his own interests at heart.
Many are willing to distort the truth and pretend to powers they don’t have to get you to pay.
They care not what doesn’t get paid so long as you pay them.
Resist, until you have taken care of your basic needs.
Don’t be intimidated into paying unsecured credit card debt before housing, transportation and taxes.
Powerless in the short run
When all is said and done, credit card collectors don’t have easily available ways to MAKE you pay.
They rely on shame, irritation or fear to GET you to pay voluntarily, because they can’t take money from you without your help.
Collectors rely on your ignorance about collection proceedings to create fear, shame, and insecurity.
Unsecured creditors can’t take money from your account or seize your assets without suing you first and getting a judgment. You have to get notice of such a suit and an opportunity to contest the charge. That’s what “due process” means.
Creditors sometimes threaten to “send you to collections” as though it was a real place, full of horrors.
In reality, it just means they are handing the problem off to someone else, who has no more real power to take your assets than the speaker does. Don’t be stampeded.
Don’t be swayed from your plan to put first things first.
Knowledge is power
Know your rights about debt collection.
The Fair Debt Collection Practices Act gives you a right to tell collectors not to contact you.
Some states have similar laws. The California Rosenthal Act applies to the creditor itself as well as any third party collector.
Be cautious about debt consolidation loans or services
Whole industries have sprung up to “help” the financially stressed recover. Some of their “help” you are better off without.
Avoid credit repair scams
Another group of scammers prey on the fixation of consumers with their credit reports. They want you to pay them to “fix” your credit report.
The things that can be done legally to correct credit reports, you can do yourself; what they propose to do may well be illegal or ineffective.
Read more
Read the FTC’s tips on credit repair
Read Elizabeth Warren’s book All Your Worth.
What to do when you’ve been sued
Image courtesy of tjunghaor
