Bill Collection Horror Stories Pt. 1

And you thought your debt collection agency was bad! A website recently made a list of bad debt collection experiences and these were among the worst of the collection. Karen Garrett, the public relations coordinator for Pittsburgh-based nonprofit Advantage Credit Counseling Service felt that she had heard it all until her agency received a call from a senior citizen late last year. She had called in tears and told Garrett that bill collectors had called her and told her that they had the police outside. If she did not pay, they were going to drag her to jail.

Debts are a civil matter, not a criminal one, and jail time is not even a retribution for failing to pay delinquent bills. “It’s extremely important for consumers to know that there is no such thing as debtor’s prison” Garrett says, rolling her eyes and smiling.

If bill collectors are making unlawful threats like physical violence, deportation and jail time, you can always report the harassment to the Federal Trade Commission or to your state attorney general’s office. The Federal Fair Debt Collection Practices Act prohibits bad behavior by third party collectors. These people do not follow the same rules as those who are collecting for the creditors directly. They are not allowed to call you at your place of employment if you ask them to stop, publish or threaten to publish your debt, reveal to anyone else that you may have a debt, harass you on the phone or use profanity. The laundry list continues.

They can’t use loss of child custody, deportation, illegal punishment like jail, or physical harm. They cannot call your home before eight AM or after 9 PM or even call at all if you have already written a request asking them to cease contact, or if you’ve hired a lawyer.

One older woman from New Jersey owed $12,000 in credit card debt after placing every day living expenses on her card. The bill collector called and informed her that they were going to take her home. She was also informed that they were not willing to take a penny less than the $12,000 she owed, and furthermore, they wanted it now. She tried to scrape up the money herself but couldn’t. “Debt collection companies are very intelligent when it comes to doing research. They will threaten targeted assets like a home or income source. But in many states, homes are protected from debt collection,

Mallory Megan works for a debt collection agency. She also writes stories on business, finance, consumer spending and collection agencies.

Filing For Bankruptcy? A List Of DONT’S Pt. 2

Don’t repay family members. The thing is that they can’t be treated different than other creditors. Under the law, relatives have the same exact legal status as every other creditor that you owe. Thus, relatives can’t be treated differently than all of the other places. I know that stinks, however it’s the law.

Don’t liquidate your retirement account! They are usually exempt property in a bankruptcy regardless of what chapter you file, so it’s unnecessary to do this. Some people liquidate and still owe massive amounts of money, and if you withdraw these funds early that makes you liable for taxes and penalties which might not be discharged in the bankruptcy.

Don’t transfer property out of your name before you file bankruptcy. This action can be undone if a fair price isn’t received, or if it were made with intent to defraud, delay, or hinder a creditor. Friends and relatives fall into this category too.

Don’t use your equity line of credit to pay off your debt. Under most federal and state law, you do have the option to claim exemption for the equity in your home. So you can go through bankruptcy and still be able to have this equity.

So in a nut shell, if you utilize your equity line to pay off debt or take out a second mortgage, you will pretty much be converting debt that would have been discharged in bankruptcy into debt which you will still need to pay so you can keep your house.

One Do: Always tell your lawyer the truth and let them fully know all of your concerns. Naturally, courts take their rules seriously and they have the ability to file criminal charges if you commit intentional fraud. And even if they don’t go that far, they can refuse to discharge a particular debt, or simply dismiss the entire case.

Mallory McGuinness works for a debt collection company. Also, she writes pieces on business and finance, consumer spending, and collection agencies