Key Message: A creditor or debt collector must not contact you about a debt if you tell them in writing not to contact you about the debt. However, the debt collector can make a genuine threat of legal action and issue legal proceedings against you.
Ignoring or avoiding the debt collector may cause the debt collector to use other methods to try to collect the debt, including a lawsuit against you. If you are unable to come to an agreement with a debt collector, you may want to contact an attorney who can provide you with legal advice about your situation.
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
If you get a summons notifying you that a debt collector is suing you, don't ignore it. If you do, the collector may be able to get a default judgment against you (that is, the court enters judgment in the collector's favor because you didn't respond to defend yourself) and garnish your wages and bank account.
The people you owe money to (your creditors) have a right to get it back. But it's not okay to harass or bully you. If you receive a notice about being taken to court, get free legal advice straight away. If you ignore it, you risk your goods being repossessed and sold.
Six Year Limitation Period
For most debts, a creditor must begin court action to recover the debt within six years of the date you: Last made a payment. Admitted in writing that you owe the money.
However, a creditor can sue you for unpaid debt, which in many cases results in the need to declare bankruptcy. Thus, while “debtors' prison” may not be a reality in Australia today and you won't actually get jail time for a debt, there can still be legal repercussions for not paying your debts in a timely manner.
You're still liable for your bill even after it's sent to a collection agency. Many people don't want to pay collection agencies, perhaps because there's no immediate benefit for paying off the debt—other than ending debt collection calls.
You have the right to send what's referred to as a “drop dead letter. '' It's a cease-and-desist motion that will prevent the collector from contacting you again about the debt. Be aware that you still owe the money, and you can be sued for the debt.
Debt-trap diplomacy is a term to describe an international financial relationship where a creditor country or institution extends debt to a borrowing nation partially, or solely, to increase the lender's political leverage.
You can ask the creditor — either the original creditor or a debt collector — for what's called a “goodwill deletion.” Write the collector a letter explaining your circumstances and why you would like the debt removed, such as if you're about to apply for a mortgage.
Because debt collectors are not permitted to contact anyone other than you or your spouse, most often a debt collector is not allowed to leave voicemails at work.
Debtors can negotiate with debt collectors to pay less than the amount they owe. Still, paying the full balance owed may be your best option, especially where your credit score is concerned.
Unfortunately, a debt in collections is one of the most serious negative items that can appear on credit reports because it means the original creditor has written off the debt completely. So when a debt is sent to collections, it can have a severe impact on your credit scores.
You are past-due, or delinquent, on your bills and your card issuer's collections representative calls you to pay your overdue balance. After about six months (depending on the lender), they will give up.
Typically, a creditor will agree to accept 40% to 50% of the debt you owe, although it could be as much as 80%, depending on whether you're dealing with a debt collector or the original creditor. In either case, your first lump-sum offer should be well below the 40% to 50% range to provide some room for negotiation.
Debt-to-income ratio targets
Now that we've defined debt-to-income ratio, let's figure out what yours means. Generally speaking, a good debt-to-income ratio is anything less than or equal to 36%. Meanwhile, any ratio above 43% is considered too high.
There are laws about what someone can and can't do to recover a debt. They can't: send you to prison.
Organise a settlement offer with you that may make it easier to pay off the debt. Sell your debt to another company who will have the same arrangements and powers as the original creditor. Obtain an order from a court to repossess some of your property. Take court action against you.
Illegal behaviour and debt collection
use physical force. use coercion. unduly harass or hassle the debtor. mislead or deceive the debtor.
Your debt will go to a collection agency. Debt collectors will contact you. Your credit history and score will be affected. Your debt will probably haunt you for years.