More on Debt Collection

My commenters offer wise advice.  One points out something I neglected to mention:  do not pay the debts of dead people.  Many collectors will attempt to collect from children.  That's a matter for the estate, not the kids, and if there is no meaningful estate, the debt dies with them.  Do not let an unscrupulous collector tell you otherwise.

Meanwhile, a consumer advocate writes the following:

I respect your passion, but you're inaccurate on some counts. I'm not a lawyer, but as a consumer rights advocate, I'm familiar with many of the laws you mention.

It's isn't against the law to sue after the Statue of Limitations has expired. The statute of limitations can be used as an affirmative defense. If you inform the debt company that you're aware of your rights, and that the debt is past the Statute of Limitations, then it can become interesting -- if you're still sued, does this count as an abusive debt collection practice. There has actually been small claims law suits based on this as a violation of FDCPA.

The FTC is more interested in larger issues.Do file a complaint, because they make take a larger action against the company. And always file a complaint with your state Attorney General. Most states have gone after illegal debt collection practices. You, as an individual, can sue and get a $1,000 if you show that the debt collector violated the FDCPA. If the debt collector has made an illegal entry in your credit report, you can sue for a FCRA violation, too.

You can tell the debt collector not to contact you again, by phone or letter. At that point, all they can do is send you one letter acknowledging your request. And they can sue you in court.

You DO SHOW UP IN COURT. There are consumer rights lawyers in most areas. Many times they'll help for free, or for a small fee. They are worth it. At a minimum, if you have to, show up by yourself and answer any court documents. Many times debt collectors do not have enough information to get a judgment if the people just show up, ready to challenge the collector. DON'T IGNORE THE SUMMONS.

(Sorry for caps, but I really wanted to make this point.)

Do not make a payment on the debt if you're planning on contesting the debt. If you do, you start the statute of limitations clock all over again. Yes, even a $5.00 payment restarts the clock.

Even if you do owe the debt, and want to pay it, make a deal and get it in writing. Most of the time, the debt will have illegally piled on interest and "fees". A $25.00 debt suddenly becomes a $1,800 debt. If you dispute the amount, show up in court and contest the amount. If you make a deal, get it in writing. If you make a payment, do it by check, keep all the receipts. Again, though, the way to protect yourself from illegal collection is to contest all debt collection activities -- get the company to prove both the amount, and their rightful claim to collect the debt.

Again, most places have consumer advocate lawyers. Do contact one of them, they'll help you. In addition, do read up on the online literature on the FDCPA and FCRA. Knowledge is power.

I am also beset by the usual number of debt collectors complaining that if people PAID THEIR DEBTS this wouldn't be a problem

Item one:  TYPING IN ALL CAPS is less useful than you would think in convincing people.  It's like how Mom still loves your little brother more, even though you screamed at her for three hours last Thanksgiving.

Item two:  It is absolutely true that there is a substantial population of unscrupulous people out there who are not interested in whether or not they actually owe the debt; they are willing to take advantage of technicalities in order to weasel out of paying.  So I can understand the debt collector's frustration at such lists.

Item three:  That said, there is also another substantial population of unscrupulous people out there who are not interested in whether or not these debtors actually owe the debt.  Those people are known as "debt collectors".  Not all debt collectors are unscrupulous, of course, but there does seem to be a detectable trend. 

I've been collected on twice for debts that I didn't owe, which took hours of my own time to straighten out, since unlike the earnest debt collectors apparently populating my comments section, the collectors who called me reacted to being told that I didn't owe the debt with either apathy or abuse.  This is about par for the course for others I know (all of us good, bill-paying citizens), and someone I know who has worked at a debt collector also confirms that at the abysmal pay scale he worked on, he had neither time nor energy for figuring out which debts were legitimate.  His job was to get money from anyone who would give it to him.

I am also somewhat familiar with the economics of the debt collection industry, and thus know that--as several of my commenters report--what happens when you figure out that you have the wrong guy is not always that the calls stop.  More often, you eventually give up the debt as uncollectable, sell it even farther down the food chain, and then the cycle of "Calling the wrong guy" starts all over again.  Debt collectors are poorly paid, poorly trained, and constantly violate the applicable laws through either ignorance or malice.  Anyone who is trying to collect a debt that is eight or more years old basically starts out by knowing that a) it's illegal and b) it's very unlikely that they can properly document the debt.  It is simply a lie that if you pay your bills, you'll never get a call from a collector.

So while I have no interest in allowing people to exploit the law in order to evade their debts--if you need to evade your debts, declare bankruptcy like an upright citizen--I do have an interest in helping people deal with a debt collection industry that isn't interested in anything except getting paid.

Update:  A debt collection attorneyfrom Kentucky  in the comments says that his state's written contract SOL of 15 years applies, rather than the shorter 5 year open agreement SOL which usually applies to credit card accounts.  I would be shocked if many collectors pursuing 10 year old debts could produce a valid copy of the written contract, but never say never.  At any rate, it's never good policy to ignore a debt, or a summons, even if you think it's over the SOL.