Collector Dollar
Posted in Uncategorized on 07/22/2007 11:11 am by admin
Collector Dollar
 |
 PRESIDENT BARACK HUSSEIN OBAMA ZERO $0 DOLLAR BILLET NEUF COLLECTOR NOVELTY BILL  US $1.95
|
 $5 US NOTE 1963 SERIES RED SEAL 5 DOLLAR CIRCULATED CONDITION COLLECTOR US $15.00
|
If I had a dime for every time a bill collector from a collection agency threatened someone in debt with a lawsuit and actually followed through on it, I would probably be an extremely poor man. It's rare for a collection agency to sue people but it is more common for the bill collector to threaten legal action.
However, you should be aware that when you borrow money as a loan or on a credit card you are in an agreement. Creditors use carefully worded contracts so they do not lose their money if you default in your payments. Understand that anytime you are in breach of a contractual arrangement, you are exposing yourself to a lawsuit.
It's because of this fact that bill collectors use their seemingly endless supply of one liner's that end with threats of "legal action".
Below are some reasons why the threat is rarely followed by action:
Suing someone takes time, financial & human resources.
Despite that bill collector going on about being in debt and suing you for being a bad person, it's rarely an emotional decision to sue and more of a business one. Throwing good money after bad in hopes a lawsuit will collect a debt is a colossal waste, if you know you can never do anything with a judgement once you get it.
Supporting documents are required for a lawsuit.
There are situations where actual proof that the debtor owes the debt is somehow unavailable. A judge needs to hang his hat on something when issuing a judgment to a creditor against a debtor, and they want to see proof the debt is owed.
The statute of limitations.
This is a law in place that defines the period within which legal action may be taken. This time frame varies depending on your laws so you would need to check with a licensed professional in your area.
It's far more cost effective for a collection agency to threaten legal action rather then actually spend the human resources, time and money at actually doing it. That's why practically everyone dealing with bill collectors is threatened with a lawsuit at some point in the collection cycle. Collection agencies are masters of empty threats.
Now, don't rest too easy, there are situations where the threat of a lawsuit may be very real. You have to be alert to two points in the collection cycle. The original creditor and the debt buyers.
The collection cycle usually follows this order: Original Creditor --> Collection Agency --> Debt Buyers.
Some original creditors can be litigious. What that means is they are inclined to sue you if they know you have the means to pay the debt and/or you own a home with equity. They may decide to hire a law firm to sue you to secure the debt with a judgement rather then assigning the debt to a collection agency to harass you.
The collection agency is usually (but not always, some creditors skip this step) the second step. The agency is a paid a commission usually ranging from 10-25% of what is collected for the original creditor.
The debt buyers are often the last collection step. It's usually some form of a collection agency that buys debt for a few pennies on the dollar. Because the debt buyer owns the debt, they can do what ever they want with it. I have seen some debt buyers just blindly sue people when there are no assets to satisfy a judgement. It's a really bad business decision but it does happen sometimes. Others won't even spend the time or money, it depends on company policy.
A debt assigned to a collection agency on the other hand is a different story. I would estimate that your chances of actually being sued by a collection agency that has been assigned a debt for collection, is about as good as being struck by a bolt of lightening on relatively clear day. However, it is also fair to say that if you are behind in your payments and owe debt then your chance of being threatened with a lawsuit by bill collectors is nearly as certain as death and taxes.
Debt is tough to deal with; there is no easy way out of it. Seek help if you need it, debt settlement is one of the best alternatives for people dealing with collection agencies because it is fast, effective and has little to no further impact on your credit rating.
Richard Cooper is Founder & CEO at Total Debt Freedom Inc. Canada's most respected debt settlement company. Total Debt Freedom offers debt settlement plans that can save you 40-70% of what you owe and get you debt free in 1 - 3 years. http://www.totaldebtfreedom.ca