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The Power of Debt Collectors

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One of the scariest and most annoying things my clients have to deal with are debt collectors. Debt collectors obtain most of their revenue from people who fall behind on their loans such as student loans, medical bills, auto loans, credit cards or mortgages. They can be relentless and if you are not proactive, they can take advantage of you. It is important to know what their true power is and how you can defend yourself through filing for bankruptcy if it comes to a judgment being filed against you.

There are limitations as to what debt collectors can do when it comes to contacting you.  They may not come to your workplace and they are not allowed to harass you in any way. If you feel that you are being unfairly harassed by a debt collector, you can file a written complaint against them. Debt collectors cannot arrest you for your debt and they cannot pursue you for debt that you do not owe. Contrary to what they claim, they are also not allowed to call you whenever they want. Debt collectors are regulated by the Fair Debt Collections Practices Act.

As far as the powers that debt collectors do have, their main goal is to seek payment on an expired or overdue debt. They will and do pressure you into making this payment. In reality, the power of the debt collectors lies in their ability to sue you.  Up to that point, they can contact you by phone or mail, but that is about all. After they initiate a lawsuit against you, things can move quickly. 

Once they file the paperwork to sue you, you have 30 days to respond to the lawsuit. If you do not respond in 30 days, there will be a default judgment against you.  Once this judgment against you exists, the debt collector CAN AND WILL do the following:

  1. Garnish your wages
  2. Levy your bank account
  3. OR place a lien on your home

If you are sued or have a money judgment, it is important to contact a Debt or Bankruptcy attorney and see about filing for bankruptcy. By doing so, you will get rid of the judgment or prevent the garnishment of your wages from going through.

If you are struggling with debt, Khan Law will work with you one-on-one to find the best available solution to your financial problems–whether the answer is bankruptcy or negotiating with creditors or undergoing credit counseling. Contact Alia today for a free 30 minute consultation.