If you are behind on any of your bills, or there has been a mistake made on your credit report indicating you are behind on your bills, you may be receiving communication from debt collectors and debt collection agencies. The Federal Trade Commission (FTC) receives complaints from consumers in a variety of areas, and debt collections is at the very top of the list for the amount of complaints it receives each year. As of January 2, 2013, the Consumer Financial Protection Bureau (CFPB) began regulating the nation’s largest collection agencies to protect consumers from unfair practices and to ensure that debt collectors are acting in accordance with the law. This is a big step in protecting consumers’ rights in the U.S., but unfortunately most collection agencies are not large enough to fall under the CFPB’s regulatory power. With an annual revenue of around $12.2 billion, the debt collection industry isn’t going away any time soon.
There are many types of debt collectors, and each employ its own strategy in collecting a debt.
What exactly is a debt collector?
This is a broad term that can encompass many different types of organizations, companies, or individuals. A credit card company that originates the credit can be a debt collector, but it can also be a debt buyer (a company that purchases the debt from a creditor), a collections agency (if debts are past due), or a collections law firm.
Typically, debt collections follow a certain course of actions, but each company has its own procedures around the specifics. Here is what typically happens in the debt collections process:
Once you fall behind or become delinquent on a bill, the creditor might attempt to collect the money from you directly.
If this fails, the creditor will likely either send the debt to a third-party collections agency or sell the debt to a debt buyer.
Either way, another company will begin collection efforts, normally in the form of demanding payment via letters and telephone calls.
If these efforts fail, then the account will be forwarded to a collections law firm. Many times this will lead to a lawsuit.
If you are facing calls from a creditor or another debt collector, an Ohio consumer law attorney should be able to assist throughout the debt collection process. If you simply do not want to deal with debt collectors, but do wish to resolve the problem prior to a lawsuit being filed against you, a consumer protection lawyer will be able to step in and attempt to reach a reasonable settlement. If a lawsuit is filed against you, he or she will be able to quickly and efficiently analyze your case, select the appropriate defenses, and search out any counterclaims. If the debt collectors have engaged in harassing or deceptive conduct, it is possible to counterclaim against a debt buyer based on the Fair Debt Collection Practices Act. Although a counterclaim is not possible against third-party collectors or an offending collection law firm, a separate lawsuit may be filed on your behalf.
It is very important to contact an Ohio consumer law attorney as soon as possible after being served with a lawsuit, as you only have 28 days from the service date to file a response. However, if you ignore the lawsuit, and a judgment is rendered against you, all hope is not lost. An attorney might be able to settle the judgment on your behalf thereby avoiding garnishment procedures. If that is not viable option, it might be wise to consider bankruptcy options.