Under the Fair Debt Collections Practices Act, collectors are prohibited from threatening violence, using profane language, calling incessantly, inflating debt and implying they are attorneys or law firms. They can’t arrest you, garnish your wages or properties; unless they actually plan to take action through a court order.
Here were some outrageous allegations of debt collection abuse:
- Threatening to take away your children
- Posing as a law firm and acting as if they have legal rights over you.
- Threatening to dig up dead bodies for failure to pay funeral bill.
- Promising to hurt family pets.
- Collecting Debts owed to other companies.
When dealing with collection calls, know your rights.
You can negotiate when you know you legitimately owe the company. The agencies usually buy bad debt for pennies on the dollar. This means if you can write a check today for the amount you negotiate. You can start your negotiations at 30 cents for every dollar owed. So you can ask them to take a check for $300 when they say you owe $1,000. If you need to make payments, they will get you for a higher percentage. Make the deal, if you can.
Do NOT negotiate on debts that are older than 2 years old. The reason being is whatever amount you pay the collector will hit your credit report with today’s date. This essentially updates the debt from 2 years ago ( when it was starting to be less important) to today’s date and can drop your score 50-60 points.
Never settle debts with accounts more than 4 years old in Pennsylvania. Because you opened up the statute of limitations on yourself, they can come after you for the next four years in Pennsylvania (differs from state to state). This debt is still owed but not legally collectable. Meaning a district magistrate would not hear a case from a credit card company with debt from you when it is older than 4 years.
Plus if you settle a debt of any amount, the collection agency can sell the remaining amount of debt to another collector. Then that new collector will be calling you for the next 4 years.