When you are unable to pay a debt, the lender may eventually ‘charge off’ the debt if their efforts to collect it are unsuccessful. The calm that follows may end the torrent of harassing phone calls and demand for payment letters initially, but there is a strong possibility a debt collection company will buy the debt from the original lender and start the collection process anew.
So-called zombie debt collection companies make their living from purchasing bad debt from companies at a fraction of the face value. By paying as little as 3% of the original loan amount – say $30 dollars for a $1000 debt – they gain the right and incentive to collect the full debt from the borrower.
Years may have passed since you were last contacted regarding the debt, only to find a letter in the mailbox demanding payment or a call from a debt collector. If this happens to you, it is important to first obtain proof that the debt belongs to you without acknowledging the debt. Simply obtain debt the collection company’s address and promptly send them a letter disputing that you owe the debt and ask them to prove that you owe it.
When you receive the information, you may find that it is a fraudulent attempt to get money for a debt that doesn’t exist. It may also be that the debt was discharged in bankruptcy some time ago and the company was not notified. More than likely the debt is old and may fall outside the statute of limitations for collection – typically 6 years from the last activity – and you will not be required to pay it. If it is a valid debt which is part of a larger debt problem, you may want to contact a bankruptcy attorney to explore options to discharge the debt.
Stop Harassing Phone Calls from Debt Collectors
Receiving harassing phone calls from debt collectors can be very stressful, but you do have rights under the law that can help. Among them are strategies available through bankruptcy that will not only stop creditors from harassing you, but get you on track toward financial recovery when you are in a difficult situation. Contact the Peoria creditor harassment law offices of Charles E. Covey to explore strategies that may benefit you and your family at 309-674-8125.