He Who Talks It Is Usually Full Of It

If you read the Facebook blogs and the online spam from many credit repair companies, you will find a lot about how to handle debt collectors.  One of the many narratives you will see is the claim from some credit repair companies that under no circumstance should you pay a debt collector.

This is simply bad advice.  The logic that the credit repair scam companies follow is that there is no continuation of ownership of the debt from the original creditor to the third party debt collector, or that since the merchant charged off the account, they have no right to collect on the debt.  This rhetoric is a hype technique that scam credit repair companies use to get you excited about their apparent abilities to absolve you of past obligations.

There is evident most states, Florida included, that merchants have the right to assign and sell their accounts receivables to third parties, and with that transfer, is the right to collect from you.  If you follow the advice of these online and Facebook suggestions, you may find yourself in a courtroom with a lot more debt tacked on to what you actually started with, and later garnishments.

For clarity, you should never blindly pay a debt collector that calls you out of the blue.  There are 4 steps that you should take to prior to paying:

1. Make them prove the debt is yours.  For this, they will present a contract for services or a series of payments that you have made toward the account for which they are now collecting.
2. Make them prove the amount they are collecting is the amount you actually owe.  It is illegal for a debt collector (non-attorney) to charge interest or fees unless it is explicitly mentioned in the original terms and agreement with the original merchant.
3. Make sure the debt collector can legally collect.  There a number of laws that can determine if you actually still owe a debt and if the debt collector can actually collect in the State.  The simplest rule to look out for is the age of the debt.  If you signed up for the account in question while you were a resident of Florida, most consumer debt (non-federal or non-state) debts are unenforceable after five years from the date you stopped paying the original creditors.  After the five year mark, you legally have no responsibility to pay.
4. Solicit for both a reduction in the amount and a deletion for payment.  Paying off a collection account will not get it removed from your credit report.  You must negotiate that the account be removed.  Also, many times there is an opportunity to save a little money (at least the interest and fees charged by the original creditor) if you ask.

If you have questions as to whether or not you should pay a charged off debt or a debt collection account, call us for a free consult at 813-567-5855.

Make the Choice. Make the Change. Delta.