When debt collectors start calling, we might consider throwing the phone out the window. But that’s not the best way to deal with collection efforts. If you ignore them, they will keep calling for months or even years on end. And no one wants to live in fear every time the phone rings.
Debt collectors are rarely as unreasonable as we imagine them to be. They want to collect the money they’re owed, but they realize that they are more likely to succeed if they work with us. And the law prohibits them from threatening or harassing us. Here are five tips for effectively dealing with collectors:
1. Know your rights. It pays to familiarize yourself with the Fair Debt Collection Practices Act, which protects consumers from unscrupulous collection practices. If at any time you feel that your rights have been violated, you can report the incident to the Federal Trade Commission or file a lawsuit to collect damages.
2. Be honest. Let the collector know if there are extenuating circumstances that have caused you to fall behind or stop making payments altogether. This won’t stop them from trying to collect the debt, but it could buy you some time and make it more likely that they will work with you to get things resolved in a way that is acceptable to both parties.
3. Know how much you can afford to pay each month, and don’t let them convince you to pay more than that. Even if they take all of your obligations into consideration and tell you that you should be able to pay a certain amount, you may not be able to pay that much realistically. If the collector insists on not accepting less than a certain amount, you may want to seek legal advice.
4. Take notes. Each time you speak to the collection agent, write down the highlights of the conversation along with the date and time of the call. Keep these notes for future reference, and if the collector contradicts himself, you’ll have your notes to refer to. These notes will also be helpful if you end up filing a complaint or lawsuit.
5. If you reach an agreement, stick to it. As long as you keep up your end of the bargain, the collection agency can make no further efforts. If you find that you won’t be able to make a payment on time, contact the debt collector immediately and let him know when you will be able to pay.
No one looks forward to dealing with a collection agency. But if you are honest and reasonable, it’s rarely as bad as you think it will be. In most cases, you can work out a mutually agreeable arrangement, get your debt paid off and get on with your life.
Debt Collection Statute of Limitations
If you fail to repay a debt in full, it doesn’t just disappear. It’s usually sold to a collection agency, who may hound you about it for years. If that agency doesn’t collect payment, they may pass it on to another, and that agency may pass it on to another. And you may still get calls and letters about the debt years later.
Surprisingly few consumers know that debts are subject to a statute of limitations. This means that creditors and debt collectors have a certain time limit to collect the debt or sue. If this time limit lapses, they no longer have a case against the debtor. They can attempt to collect or even file suit, but if you use the statute of limitations as a defense, they will not prevail.
How Long Is the Statute of Limitations?
The statute of limitations varies according to the type of debt and the state. It may be as short as two years or as long as fifteen. Most states have different statutes for oral agreements, written contracts, promissory notes and open accounts.
Auto and installment loans are considered written contracts. Credit card debt most often falls under the open accounts category. But in certain instances, such as when the credit card was secured with a written agreement, it is considered a written contract. This is often a matter for the court to decide if there is any doubt.
When Does the Statute of Limitations Begin?
When the statute of limitations begins is a matter of some debate. Some say that it begins on the date of your first delinquency. Others claim that it begins when the creditor sends a demand letter, when the last payment was made or when the debt was written off.
In general, the statute of limitations begins when the creditor has a cause of action. This means different things according to the credit agreement. In some instances, this occurs when the creditor demands payment in full. In others, it occurs when you become delinquent on a debt. If you’re unsure, a consumer rights attorney can help you determine when the statute of limitation starts.
It’s important to note that the statute of limitations can be restarted under certain circumstances. This may occur if you use the account again. It may also occur if you make a partial payment or agree to a payment arrangement. If a creditor contacts you, you can protect yourself by refusing to acknowledge that you owe the debt or make any kind of payment or agreement. Simply state that the statute of limitations has expired. They will probably either leave you alone or take you to court, where you can defend yourself in the same manner.
The fact that a debt still appears on your credit report doesn’t change the fact that the statute of limitations may be up. Knowing the law in your state could save you from paying a debt that cannot be collected. For more information, contact a consumer rights lawyer.
Explanation of Debt Contracts
Few people go through their entire lives without incurring some type of debt. When you go in debt, it’s important to know your rights and obligations. These rights and obligations vary according to the type of debt contract you enter into.
By definition, a contract is the exchange of promises between two people. This can take on many forms. When it comes to debt, there are four basic types of contracts:
* Oral contract – This type of debt contract has been around since the beginning of time. It simply involves one person lending another person money, and the borrower agreeing to repay that money. Nothing is put in writing.
Oral contracts are legally binding. The problem with them is that they are more difficult to enforce. This is due to the fact that there is no written proof of them. There may not even be any witnesses to the agreement except for the two parties. Due to these factors, it may be difficult for the creditor to collect.
* Written contract – A written contract may be as simple as an agreement written on a piece of notebook paper, or as complex as a multi-page document. When a loan is involved, the terms are defined and the contract is signed by the creditor and the debtor. This type of contract usually holds up well in court, even if it is created informally.
* Promissory note – A promissory note is very similar to a written contract, but there is an important difference. In a promissory note, the payment schedule and amount of interest charged are spelled out. Promissory notes are rarely informal agreements. Examples include mortgages and auto loans.
* Open-ended accounts – An open-ended account usually does not require a traditional contract. It is a revolving line of credit in which the balance varies. The most recognizable example is a credit card.
The category under which a given debt contract falls may sometimes be confusing. Oral contracts are easily identifiable as such, but there is often confusion about the subtle differences between a written contract and a promissory note. Credit cards are open-ended accounts, but there have been cases in which creditors have attempted to enforce them as written contracts. But in the absence of an actual written agreement, this would not hold up in court.
No matter what type of debt contract you enter into, it’s important to read it carefully. No matter how reputable the creditor may be, it’s essential to know the terms to which you’re agreeing before you sign anything. It’s also a good idea to familiarize yourself with the laws governing the different types of debt contracts. If you need assistance, an experienced consumer rights attorney can help.
Fair Debt Collection Practices Act: An Explanation
If you’ve ever gotten behind on your bills, you know that debt collectors are relentless in their efforts to get the money you owe. Sometimes, their behavior borders on harassment. If you’re getting calls from a creditor or collection agency, it’s important to know that you have certain rights.
These rights are outlined in the Fair Debt Collection Practices Act (FDCPA), which makes up a portion of the Consumer Protection Act. The FDCPA prohibits certain practices in the collection of debts and provides a means of disputing and validating the information that debt collectors have. It also requires debt collectors to notify consumers of certain rights and other information.
What Debt Collectors Cannot Do
A key aspect of the FDCPA is limitations on communication with debtors. A collector is not allowed to call a debtor before 8:00 a.m. or after 9:00 p.m. in the debtor’s time zone. It is also prohibited to call a debtor at work if the debtor has stated that accepting such calls is prohibited or discouraged by his employer. In addition, the collector may not threaten arrest or legal action that is not permitted or that he does not plan to follow through on. Likewise, he may not use abusive language or profanity or claim to be an attorney, a law enforcement officer or anything else other than a debt collector.
Debt collectors are prohibited from discussing a consumer’s debt with any third party except for the consumers spouse or lawyer, and from publishing the debtor’s name on a “bad debt” list. If the debtor is represented by an attorney and the collector has been notified of this, he cannot contact the debtor directly. Further, a debt collector may not report or threaten to report false information to the credit bureaus.
What Debt Collectors Are Required to Do
First and foremost, a debt collector must identify himself as a debt collector during every call and in every letter or other communication. He must also state that any information obtained will be used to collect the debt. And he must notify the consumer that he has a right to dispute the debt within five days of the first communication regarding each debt.
If the consumer requests it within 30 days of notification, the creditor must supply the name and address of the original creditor if the debt has been sold or transferred. Verification of the debt must also be provided if the consumer requests it within the same time frame. From the time of the request until verification is sent, the creditor may not contact the debtor.
If you feel that your rights under the FDCPA have been violated, you can report the collector to the Federal Trade Commission. You may also file suit to collect damages in such an event. Complaints may result in fines, and the creditor may be ordered to pay damages and attorney fees.
The Importance of Financial Communication
Studies have shown that money is one of the most frequents points of contention between married couples. But most of us don’t need a scientific study to tell us that. Whether you’re pinching every penny for all it’s worth or have more money than you know what to do with, sharing finances with someone else is bound to cause some disagreements.
Even the most compatible couples often have different ideas of how money should be handled. But that doesn’t mean they should call it quits if they can’t see eye to eye on financial issues. In many cases, it just means that they need to work on communication and compromise.
In many (if not most) couples, one is appointed as the financial manager of the household. This may happen after much discussion, or it may just happen without a conscious decision being made. The person managing the finances usually pays the bills, makes banking decisions and manages debts as he or she sees fit. This isn’t necessarily a bad thing in itself, but it tends to separate the other partner from the financial picture. And when he or she does get a glimpse of it, if it’s not as good as imagined, it can cause problems.
That’s why it’s so important for both partners to have a hand in the finances. If one does not want to pay bills and such, that’s fine, but he should be kept in the loop about everything. If necessary, consider having a weekly meeting in which you discuss the state of your finances. This will eliminate unpleasant surprises and the arguments they may cause.
Keep Track of Spending
A frequent source of friction in a marriage or domestic partnership is spending. One partner might strive to be as frugal as possible so that more money can be saved or used to reduce debt, while the other feels that buying something she wants every now and then is fine. Instead of trying to work out a compromise, they might hide money or spending to avoid confrontation.
But when such lies are discovered, they’re bound to cause serious problems. That’s why it is crucial to be completely honest about not only your own spending, but your expectations for your partner’s spending. You may not see eye to eye, but being completely honest is the only way to truly know the state of your finances. It enables you to make a budget as well, and this can be a helpful tool in working out such differences.
When it comes to finances in a relationship, clear, honest communication is a must. Sharing your goals and ideas on how to achieve them will help you approach money matters as a team rather than fighting over them. Even if you have very different views on financial matters, it’s almost always possible to find a middle ground that both of you can live with.
Financial Stress Can Make You Ill – Five Ways to Combat It
Financial stress has many causes. For some, job loss or illness has made it difficult to make ends meet. For others, rising prices or unexpected expenses cause money worries. But whatever the reason may be, financial stress can take a serious toll on one’s health.
Financial stress is a frequent trigger of mental health issues such as depression. Worrying about how you’re going to pay the bills and put food on the table can take over your thoughts, and it becomes difficult to enjoy the good things in life. Another common issue is anxiety, which may be accompanied by scary panic attacks.
Depression and anxiety can lead to physical health problems. These may include stomach ulcers, high blood pressure and insomnia. Left untreated, stomach ulcers can cause dangerous internal bleeding, and high blood pressure and insomnia increase one’s risk for a heart attack and other serious problems.
As you can see, financial stress can be the precursor to a nasty chain reaction. Here are five ways you can fight financial stress and avoid these grave health concerns.
1. Take time to enjoy the good things in life. When you can’t see past your financial troubles, you may forget those things that once put a smile on your face. Force yourself to forget about your troubles and do something that makes you happy, such as reading a good book, playing with your children or participating in your favorite sport or hobby.
2. Be proactive. It’s easy to fall into the trap of feeling sorry for yourself when it comes to money woes. While that may be warranted at first, the only way you’re going to get through it is to work at it. Sit down and think about ways to cut expenses and/or increase your income, then act on them. Even if you just make a small amount of progress, you’ll feel some relief and an increase in confidence.
3. Find a shoulder to cry on. Being upbeat is best, but sometimes a dire financial situation is going to get you down. When this happens, talk to a trusted friend or family member. She may be able to give you some good advice. Even if you don’t want advice, having someone to use as a sounding board will take some of the weight off of your shoulders.
4. Use stress relief techniques. A simple bubble bath can work wonders for your state of mind. If you want to try something more sophisticated, meditation has been proven effective against stress. Other things you might try include aromatherapy and massage.
5. Think about the things you’re thankful for. When you’re obsessing over your finances, take a break and think about the things that you do have. Better yet, write them down. This will help you see that financial security is only a small part of the big picture.
Stress is normal when we experience financial issues. But if you let it take over your life, your health will suffer. Fighting back will make you feel better, both mentally and physically.
Five Money-Saving Ideas for Family Fun
Money isn’t always readily available for such things as expensive outings and activities for you and your family. With the uncertainty of the economy these days, more and more families are searching for free, frugal and money-saving ideas in order to keep the family having fun together without breaking the bank. How about trying some of these options to keep your family activities happening without the costly aspect some choices may have.
1) Your local community may have a “Parks and Recreation” website or booklet available to residents. These usually include a variety of activities in different price ranges, from free to inexpensive as well as those with a higher fee. There are quite often long lists of activities which fall into the free or inexpensive range, such as community walks through area parks and trails, family cycling days or even free family days at the local indoor pool.
2) Plan regular family visits to your local library. With a little bit of planning ahead of time, each visit can be focused on a particular subject such as traditions from around the world, new crafts you can learn as a family or any other topic which can be learned about as a family. Check out books related to your choices to bring home so you can experience different cultures together. Most libraries also have DVDs or videos you can borrow for free or a very small fee. They may have some which can assist you with this family project.
3) Occasionally your community may provide a fundraising concert or performance in a park or community center. Frequently the entry fee will be a low price for an entire family, or possibly even a donation of canned goods for the local food bank. For this small donation your family could enjoy an evening of music from local talent, or benefit from the amusement of a community fair. Pack your own refreshments to bring along and you have a full day of fun for the price of a few cans of imperishable goods.
4) Hold family read-aloud days when the weather isn’t being cooperative. Rainy days, a good book and being snuggled together under a warm blanket with popcorn for a snack is a great way to bond as a family while waiting for nicer weather when you can do something else outdoors.
5) Visit a museum or zoo on family days or half-price days. What can be more fun than learning new things together while visiting a new museum exhibit, or trying to imitate the faces the monkeys at the zoo are making? Many libraries now allow you to borrow or rent passes to these locations for a very minimal price. They include admission for the whole family, and are normally valid for more than one museum or activity in your area.
If family funds are limited, it doesn’t necessarily mean fun and activities need to be limited as well. All it takes is a little bit of planning, and there is a wealth of activities you and your family can partake in while sticking to a frugal or free rule. The most important aspect of it all is spending time together, not how much or how little you spend while you do it.