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Dealing With Creditor Debt Collection Efforts

Debts can accrue over time for almost any individual in today’s day and age. It is highly likely that the accumulation of debt will result in people filing for bankruptcy. Creditors in such a situation here, when payments are being withheld, may decide to pursue collection efforts either themselves or by employing third-party collection agencies to collect on their debts. Ignoring letters and phone calls by collection agencies can put the debtor in more trouble.

The best way is to deal with the debt collectors considering the following tips:

1. Know Your Rights: Without knowing the rights, dealing with the collectors may become very difficult. Under the Fair DebtCollection Practices Act, consumers can educate themselves about their rights. They should be aware of the fact that harassing, nuisance phone calls, or threats are illegal and must be reported to the state attorney general office and to the U.S. Consumer Financial Protection Bureau (CFPB).

2. Verification of Debts: There are certain cases when the collectors put negative information on a consumer’s credit report, and this information stays there for 7 years. This information adversely affects the consumer’s ability to seek loans, mortgages, or car insurance. If you wrongly receive letters and phone calls about debts or receive court’s notice about debt lawsuits do not ignore them. As per law, the consumer can send written requests in order to verify the debt within 30 days of contact by a debt collector. So, it is very important to communicate with the collector.

3. Find a Consumer Bankruptcy Lawyer: If you have received a legal notice, find a specialized consumer bankruptcy lawyer who can represent you in court. In certain cases, collectors file a lawsuit against the consumer with little proof of the original debt he or she owes. If the consumer does not challenge the authenticity of the evidence in court, the creditor wins the case. Having representation in court may help the consumer dismiss the charges.

4. Save Copies and Records: Keeping copies of settlements or resolution of debts safe is the right approach. If ever a question arises about the debt, you will be on the safe side of having documentation as proof of settlement. Although few experts say you can keep them as long as you keep tax documents, it is advisable to keep them forever.

5. Protect Bank Accounts: In the case of non-payment of debts, the debt collectors can pursue a lawsuit against consumers. The court can order to freeze saving and checking accounts which can put the consumer under financial strain. In this situation, the experts advise keeping a separate bank account for Social Security or disability checks-these accounts are exempt from court orders for debt payments and let collectors know about exempt funds. Also, if you have filed for bankruptcy, tell the collectors about it so that they can halt the debt collection efforts.

6. Payments through a Third-Party Service: Consumers should not give bank account numbers to the collectors or pay with a personal check. In order to make payments, they should use a third-party payment service in order to have proof of payment. Also, consumers should not allow debt collectors to make a direct electronic withdrawal from bank accounts.

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