For many people, one of the worst aspects of being in debt is the fact that debt collectors call constantly. Debt collectors have become so abundant–and so earnest in their pursuit of recovering debt–that over the years, myths and misconceptions have abounded surrounding debt collectors and what they are and are not allowed to do. Myths surrounding the responsibilities of borrowers, and the actions they should take or not take, are also very common.
Below are the 12 biggest myths surrounding debt collection, and the truths behind them.
Debt Collectors Only Call About Legitimate Debts
It is natural to assume that if a debt collector is calling you, the debt they want to recover is legitimate. Making this assumption is dangerous, though, and could place you further in debt if you repay a debt that is not yours. Debt collectors do not always receive the correct information and, in some cases, they have been known to even act dishonestly. Before paying any debt, it is important to request validation of the debt–this is your right under the law.
Ignore Your Debt and it Will Go Away
It is true that Florida has a statute of limitations on debt of five years. However, this only means that once five years have expired, debt collectors can no longer try to take legal action against you, such as filing a lawsuit. It does not mean that debt collectors can no longer call you, or that the debt is erased from your credit report. If you want to be truly free of the debt, you must pay it.
Debt Collectors Do Not Take Legal Action After the Statute of Limitations Expires
So, the five years have passed since the debt and now you believe you are free and clear because the law prevents the debt collectors from taking action. This may be true, but debt collectors are not always respectful of the law, and will sometimes try to take action even though they know the debt has expired. Also, if you make a payment it may restart the clock on the statute of limitations, which means the debt collector may be able to take legal action against you.
A Cease and Desist Letter Will Make Debt Go Away
If you work with an attorney that sends a debt collector a cease and desist letter, it only means that they are prohibited from calling you directly. Again, the debt will remain on your credit report and you are still responsible for paying it. Additionally, if your debt is assigned to a new debt collector, the cease and desist demand will no longer apply.
You Can Remove a Debt from Your Credit Report by Paying It
After you pay a debt, the debt collector is only required to report the payment to the credit reporting bureaus. They are not required to remove the debt from your credit report right away. Paying debt will definitely help improve your credit score, but you may not see the immediate results you are hoping for.
Making Payments Means Debt Will Stay on Your Credit Report Longer
Most debts can only stay on your credit report for seven years, regardless of whether you pay it in full or not. Making payments on the debt does not change that time limit. The seven-year timeline starts at the date of the delinquency, not the date that you made a payment, so it will remain the same no matter how much of the debt you repay.
You Can Tell Debt Collectors to Stop Calling You
If you want debt collectors to stop calling you completely, you must tell them so in writing. A verbal statement is only considered valid if the debt collector is calling you at work and your employer has a problem with it. If you tell the debt collector that they are calling at an inconvenient time, they can still contact you but they must do so at a different time.
Debt Collection Calls Stop if You Make Partial Payment
If you owe a debt, you are expected to pay it in full. Making a partial payment may keep the debt collectors at bay temporarily, but if you do not fully repay the debt, they will start calling again at some point.
Settling a Debt Improves Your Credit Score
Debt collectors will sometimes agree to settle your debt for a lower amount and this is often a great option for borrowers. However, settling your debt will not improve your credit score right away. You will have a zero balance on the debt, which is good, but only making payments on the rest of your debt, coupled with time, will improve your credit score.
You Can Go to Jail for Unpaid Debt
Debtors’ prisons have not existed in the United States for nearly two centuries. You cannot go to jail for unpaid debts, and debt collectors cannot threaten to send you to jail for unpaid debt.
Debt Collectors Will Garnish Your Wages
Wage garnishment is one option debt collectors have to recover the amount of debt you owe. However, there is a strict process they must follow to do it. They must first file a lawsuit against you–then they must win. A debt defense attorney can provide a defense for your case that results in a favorable judgment for you, and that prevents wage garnishment.
You Can Pay the Original Creditor Instead of the Debt Collector
Many people prefer to repay the original creditor instead of the debt collector that keeps calling. This is a mistake and will only keep the debt on your credit record longer than necessary. In most cases, the creditor has sold the debt to a debt collector, so they no longer own it and cannot accept payment on the account. In many instances, the creditor and debt collector even have an agreement that prevents the creditor from collecting payment.
Our Florida Debt Defense Lawyers can Dispel More Myths
While there are many myths surrounding debt collection, the above are only a few of the most common. If you are having trouble with debt, or a collector has already taken legal action against you, our Fort Lauderdale debt defense lawyers can help. At Loan Lawyers, we have defended thousands of people in debt lawsuits, and we want to put our experience to work for you. To learn the truth about debt collection lawsuits and how we can help, call us today at (954) 807-1361 or contact us online for a free consultation.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.