Collection companies are known for their bad behavior. Although they do have the right to work on behalf of your creditors to get the money that is owed, they often go overboard and sometimes even violate government rules. Unfortunately, if you’re in debt you may feel as if you are at the mercy of these agencies and that you have no rights.

Don’t feel that way. Know your rights and force those companies to abide by them.

Contact Rules

The federal government has established rules about when you can be contacted by collection agencies. Calls before 8 am or after 9 pm are prohibited. If you receive a call during prohibited times, inform the caller they are violating your rights and ask them to call again during legal hours. If they persist, you may need to take further action.

Collection agencies can contact you at work. However, if you inform them not to call you at work they are legally bound to follow those instructions. Some companies will persist. In this case, inform the agency that you told them not to contact you at work again and that they are violating the law.

If you’ve filed bankruptcy, the company is no longer able to contact you either. Inform them that you are in the process of filing and provide them with the contact information for your attorney. They can then no longer contact you by phone or mail.

Privacy Regulations

These agencies are also not permitted to tell other people about your debt. Generally, if they have to leave a message they won’t give the name of the company and are often reluctant to say what the call is in regards to.

Despite these rules, some collection companies have been known to speak to parents, co-workers, even bosses about debt. If you find out this happened, you can take action against the agency.

Threats? Not Cool

Some collection representatives will say whatever they think will work to make you repay your debt. That includes threats, such as “I’ll send people to your house to repossess everything you own.” An agent is never allowed to make statements which cannot or will not be followed up on. Threats of illegal action, such as violence, are also violations of your rights.

The idea is simply to intimidate you and make you give into their demands for payment.

Repayment Plans

Unfortunately, many people have the misconception that they have the right to set up any type of payment plan they want with a collection agency. That’s not the case.

The collection agency has no legal obligation to accept your proposed terms for repayment or even to offer you a repayment plan. They usually will make lump sum settlement offers but those amounts must be paid in full.

Don’t assume that you can stop harassing phone calls by sending in a weekly check for $10 or something like that either. These companies can continue to contact you as long as the debt is not paid.

Keep in mind that violation of your rights entitles you to a monetary award through the courts if your claims are considered legitimate. Make sure to keep records of the offending contact and ask for the name of the person contacting you.

Not too bad actually.

I was really upfront with the agent, explained my business, explained my personal bankruptcy, etc. I have all my paperwork ready to file, I just need to get it in now to him before the end of the month.

He did say a few interesting quotes like, “We are the last creditor that you want to deal with” and “we can do things other creditors cannot”. Which is all very, very true. The thing I’ve found though, in my few dealings now with the IRS, is that if you are nice, and honest (I have nothing to hide, I know I owe them money) they aren’t like other collection agencies at all. This could be of course that they are under high scrutiny (being the government and all).

The good news is that after explaining my current revenue and expenses Mr. IRS man hinted that a payment plan could be an option. Yay! ‘Cause I don’t exactly have 18 G’s sitting around at the moment. If I did, I would totally hand them over.

Speaking with my Dad later in the day, he suggested something that I think I’m going to do. After I file the paperwork, I think I’m going to go down and meet with Mr. IRS agent man. Body language is such an important part of communication, I want to make sure he sees that I am genuinely serious about turning my business around and could make payments if they weren’t too high. Anyway, we’ll see how it goes.

It was a big relief to get this first conversation going.

How To Manage Collection Letters & Bills

I may not be able to pay all my bills, but gosh darn it if I’m not organized with them.

Step 1 – Label Your Folders

You’ll need three (two if you only have personal and no business debts) folders. Legal size is my preference, but use what works for you.

Label the folders “Current Collections – Personal”, “Current Collections – Business”, and “Reference Collections”.

Step 2 – File your collections letters

Once you have setup your folders, the system is easy. Keep your most current collection letters (offers of settlements, etc) in the appropriate folder. When I am sorting my mail, I like to open each collection letter, and use a paperclip to keep the return envelope attached to the letter.

When you receive an update statement or offer from a collection company (or, the collection company changes!), move the older letter into the “Reference Collection” file folder.

This system allows me to easily find my most recent statements when I need them. It also manages the massive amount of paper that you receive very simply.

In civil lawsuits, enforcement of a judgment is not handled by the court that handed down the decision. Instead, enforcement is left in the hands of the parties in the lawsuit. While most people comply with the court’s order, there are exceptions that require the winning party to take further action to collect the funds that were awarded. In addition to resolving the issues themselves, a judgment in civil cases almost always pays both damages and court costs to the party that prevails.

Perfecting a Judgment

Once a court of law hands-down a judgment, the next step is for the winning party to ‘perfect’ it. While specifics for doing this vary somewhat from state-to-state, perfecting the judgment is always the initial step. To accomplish this, it is important to make certain that the court’s written decision of judgment has been signed by the judge and actually filed by the clerk of the court. Generally, the court will retain the original and supply what is called ‘a conformed copy’ to the judgment creditor (winner).

In many states, Notice of Entry of the judgment must be given to the judgment debtor (loser). The date that the order is issued often determines the time period which the debtor has if he wishes to file any appeal.

Escape Through Bankruptcy

It is possible to discharge the amounts owed under many judgments by filing bankruptcy. However, there are exceptions, including judgments for the payment of child support and delinquent income taxes. Judgments also show on your credit report as they are a matter of public record and are usually discovered by the three main credit bureaus. They are not necessarily considered any more heavily than any other debt you owe and will be added-in to calculate your total indebtedness.

Appealing a Judgment

While a judgment is a lawful order from a recognized court of law, it may be appealed to a higher court if there is sufficient reason to believe that the issuing court erred. Ordinarily, this is a decision that requires a skilled attorney who is thoroughly familiar with both your case and the rules of the appellate courts. In some instances, new evidence may be grounds for appeal and if the appeal is granted, the original court is usually ordered to re-hear the matter. In most cases, appeals are filed only where larger sums are involved because of the additional court fees and attorney’s fees involved in a further legal proceeding.

Collecting on a Judgment

Obtaining a legal judgment does not necessarily ensure that you will ever collect the amounts awarded to you by the court. It merely gives you the right to take any lawful steps available to do so. You can get paperwork for pretty cheap using a Legal Zoom Promo Code for any legal transaction, could give you a heads up on this. This may include seizing property or other assets, forcing a Sheriff’s sale or even garnishing monies due to the debtor. Many civil lawsuits are never even filed because an investigation fails to turn-up enough assets to make the additional costs worthwhile.

I just got a settlement offer from the debt collector on the account (er solutions, inc. out of renton, WA) for 80% of the original amount, thus, $368.75. It says I have 14 days to accept this offer.

I’m not sure what I’m going to do here. I have 1K I still owe the IRS by July. Of my lump payments (non-reoccurring) that is the most important one. As soon as I sell some more things, that will be the first payment I make. I wonder if these guys will give me a better offer down the line. It may be worth a call to see if they will accept say 50% of the original amount. I may have that in cash in the next few weeks, and if I do, I think I’ll give them a call and see if they will accept 50% right there. Should be fun.