Facts About Debt Collection and Collection Agencies
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The United States Congress made an amendment to the Consumer Credit Protection Act to deal with a number of problems that occurred within the debt collection industry. If these issues were not handled efficiently, the structure of the credit system could have been in danger. The term "debt collector" is used to refer to an individual or organization who is given the task of collecting debts. A "debt" is defined as an obligation made by a borrower to pay back money that is owed to the lender. The debt collector will try to collect the money owed on a consistent basis, and this can be done in a indirect manner.
The proper name that is commonly given to debt collectors today are collection companies. There are a number of guidelines that collection agencies must follow when they attempt to collect debts from borrowers. The collection agency is required by law to only contact the borrower during certain business hours. They are not allowed to communicate with you during non-business hours, which will generally be between 10 p.m. and 10 a.m. If a collection agency calls during an inappropriate time, they could be subject to a number of penalties. A number of people will seek to stop collection agencies from contacting them. The only way that this can be accomplished is by contacting the company in writing to let them know that you will not pay the debt. You must also request that they stop contacting you.
Calling the company to inform them of this will not remove your obligation to pay back the debts you owe. Once the collection company agrees not to contact you any longer, that will notify you of other actions that they may be taking. In most cases, this will mean that you will be taken to court. If you do not dispute the debt claims that are being made against you, there are a number of things that may happen. First, it will not be viewed as a liability if the lender should take you to court. The Fair Debt Collection Practices Act was passed to protect borrowers from being unfairly harassed by lenders in order to pay back the debts they owe.
At the same time, it is best to avoid the practice of borrowing as much as possible. A number of statistics shows that the typical American owes about $10,000 in credit card debt, and when you have trouble making payments on this debt, the credit card company may begin contacting you for payment. A failure to pay offer your debts can severely ruin your credit, and the lender has the right to petition for a bankruptcy. In most cases, the customer will generally file for bankruptcy themselves, and the lender will use bankruptcy as a way of getting back as much money as possible. Because some collection agencies were using controversial methods to extract payments from their borrowers, the Congress passed an act which would limit their power and protect the consumer.
