Debt collectors attempt to persuade you to pay off delinquent debts. Although collectors can contact you about debts from a variety of sources, such as credit cards, medical bills, bank accounts and rent-to-own purchases, they do not usually work for the business that holds your debt. Instead, they work for third-party collection agencies that buy bad debts from a variety of creditors. Electing not to pay a debt collector can have a variety of consequences.
Continued Contact
If you choose not to pay your delinquent debt, collectors can keep contacting you until you do. They can send letters, call you at home, contact your employer to reach you at work and leave voice messages. Although these continued contacts have no legal or credit implications, they can be bothersome. Additionally, receiving collection calls at work could potentially damage your standing with your employer.
Lawsuit and Legal Judgment
If the amount of debt is large enough, a debt collector could sue you in court to obtain payment. If you refuse to respond to the lawsuit, or the collection agency wins the suit, the court will issue an order of judgment against you. Once a collection agency obtains a judgment, they can garnish your wages, seize your property and place liens on your property to collect the debt. Additionally, debt collectors may send garnishment papers to your employer, which could lead to negative professional consequences.
Other Options - Dispute, Cease and Desist
Although you may suffer no adverse consequences by choosing to ignore debt collectors, you have several other options. You can send a "cease-and-desist" letter to a debt collector, which forces said collector to stop contacting you. However, it doesn't eliminate your responsibility to pay off your account. If you believe the debt is not legitimate, you can dispute it within 30 days of receiving the collection notice by sending a denial of debt letter to the collection agency.
Other Options - Bankruptcy
Sending a cease-and-desist letter may not be wise if you owe a large amount in debt, as debt collectors may choose to file suit. Additionally, if the debt is valid, disputing the collector's charge will buy you time, but will not free you from your obligations. If you are unable to pay the debt, you can file for bankruptcy. Although it will ruin your credit score and stay on your record for up to 10 years, filing for bankruptcy will immediately stop all judgment orders and collection actions.
0 comments:
Post a Comment