The Top Promises to Contest a Collection
Receiving a letter stating that you owe money and your bill has been forwarded to a collection agency can be a stressful experience. Technically, collection agencies can come and claim the money even when the debtor feels that the amount demanded is incorrect or non-existent. But you also have legal options! Challenging the collection is usually the best approach in the sense that you can solve the situation in your favor. Here are the top reasons why filing a dispute is worthwhile: Here are the top reasons why filing a dispute is worthwhile:
The first, and perhaps the obvious, cause for objecting to a collection is when the account is not indeed yours. Occasionally, debt collectors may attempt to collect a debt from the wrong person if there is some mistake or misunderstanding, common names. Often, there will be a name of the original creditor provided, which may be an account that was never opened by you.
Ask the collector to confirm that you owe him/her money and that you have signed some documents such as the credit application form or the terms and conditions of the credit. If they can’t, write a letter saying you do not agree that you owe the amount. If they do not follow the guidelines provided in the Fair Debt Collection Practices Act, they are prohibited from continuing to attempt to collect the debt until they have been properly identified as the debtor.
This amount of money which is owed is incorrect
No matter if you owe an amount of money, it is always reasonable to dispute the amount that has been claimed from you. A lot of individuals end up racking up interest, over-limit fees, or any other charges that cause the total balance to amass more than what is expected over time. Check any statements you have for discrepancies between the amount of money you think you owe and what the agency’s records show.
You can also challenge extra fees, especially where you were not adequately informed of increased interest rates or where fees were increased per the terms of the credit agreement you signed. The client should request the collection agency to present a detailed accounting of the total amount charged and their justification for each element of the charges and penalties. This may lead to them discovering that their records are inaccurate and perhaps drop some of these fees.
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The other reason that one can argue about a collection account is if they are free from being collected legally. The statute of limitations is used to determine the time limit within which unpaid debts can be reported in your credit report or eligible for collections. The period of this stage ranges between three and six years depending on the state.
If the date of delinquency stated was after the statutory period, let the agency know that this debt has become null and void. This one has to be written and one copy should be kept for personal records. In most instances, to properly dispute an old debt which is often invalid, one has to request certain trade lines to be deleted from your credit report as well. These can assist in raising the scores as indicated above.
To be very precise, it could erase a negative trade line
Regarding credit reporting, getting a collection removed from credit files can count as motivation on its own when disputing an account. Regardless of whether it is paid or unpaid, the effect of collections on credit rating lasts for seven years from the time the account was initially reported as delinquent. This is particularly because having this major derogatory mark removed enhances your possibility of being approved for financing or better loan terms.
Challenging makes the collector go through compelling proof that the debt is valid for the customer. When they cannot sufficiently substantiate the information or furnish documentation as required, the credit bureaus are obliged to expunge reporting of it. Simply be wiser in challenging only wrong, unreliable, or outdated collection back to the right reported debts not as a means of winning, but to prevent backreference.
The ability of the Original Creditor to Collect
Of course, several factors that can influence the answer to the question are involved; including the source from which the call is originating, that is who specifically is contacting you about an old bill. Sometimes the company you originally owed money to can no longer directly pursue the debt but sell the account to a collection agency. This is unlawful if you had not been informed through a legal notice of the transfer of debt beforehand as spelled by the FDCPA.
Challenge the authority of the collector to demand payment if the original credit card company, doctors, or other creditors did not advise you when you handed over your account to them. Place all collection rights in writing on hold for the agency until they produce consent and documentation showing the particular creditor, themselves, assigned your debt.
You Are Ready to Negotiate a Settlement
The last of the strategic reasons why one may opt to challenge a debt has to do with the possibility of a payout. Debt collectors use aggressive tactics to demand their money and they do this so that they can have a chance of getting a partial payment right away even though they are fully aware that they can get much more than that much later. However, they often begin bargaining at a much higher point than is reasonable or necessary. I am suggesting that challenging certain allegations or the overall dollar figure put forward can cause them to reconsider what they would logically be willing to accept as a settlement.
Do not assume that a successful dispute means you will eventually pay off the collection account. However, when establishing a situation of setting the correct amount to be paid to the agency, arguing some aspects of their claim makes the agency probably accept a lower offer. So just make sure to have any negotiation done cautiously in writing first before wiring the money, especially to ensure that the payment made is a complete settlement.
To dispute collections, certain guidelines as contained in consumer protection laws need to be followed closely. But when used appropriately, it can lead to the elimination of false and unverified debts, expunging of prejudicial credit reporting, as well as getting good terms for what one owes. When you realize your rights together with the importance of good records, it places you in a position to reverse unfair collection.
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