The First Thing You Should Do If A Debt Collection Agency Calls

When it comes to the subject of collecting debt, there are a lot of misconceptions and misinformation. Here are some tools of the trade that you can use if a bill collector ever calls you. When the debt collector calls, the first thing you want to do is determine if this is a third party collector or an in house collector. Third party collectors are hired by creditors on contingency, while in house collectors are the creditors.

Ask the debt collector “Are you contacting me as a creditor or a third party collection agent?” Not only will this give the bill collector the impression that you are competent, but it is important to know, because third party debt collectors must abide by strict regulations enacted under The Fair Debt Collection Practices Act. Keep in mind that most debt collectors are third party ones.

The collection agent will read what is called a “mini Miranda.” What this means is that your telephone call is being recorded and anything you mention can be used by the agency to collect debt. After this they will ask you about the debt that they are calling about. Instead of responding in any way that would acknowledge that you owe debt, politely request some initial information from the debt collector before the conversation continues. By law, a third party debt collector is required to give you the name of the agency, their address, fax and phone number, and the name of the original creditor. Ask for all of this, the debt collector’s name, and their specific phone number.

After you have gotten this key information, inform the collection agent that you are busy right now and will call them back in an hour. Keep in mind that debt collectors will always try to achieve a sense of urgency and may insinuate that you must or should talk to them now, but you do not have to. Now, after hanging up, you are in control because the ball is in your court.

Take this time to try to remember if you know what debt the collection agent might have been asking you about. If you remember legitimately taking on the debt, and the amount of the debt is accurate, contact the collection agent back and ask them if there is some type of repayment plan you could work out with them. It’s important to pay off this debt before the debt collector marks your credit score negatively, or even recommends that the creditor file suit against you.

Mallory Megan works for Rapid Recovery Solution and writes articles on credit collection agencies. This article, The First Thing You Should Do If A Debt Collection Agency Calls is released under a creative commons attribution licence.

What Every Collection Agency Should Know About The CARD Act

On February 22nd, 2010, the Credit Card Accountability, Responsibility and Disclosure (CARD) Act took effect. The CARD Act had one major purpose: to attempt to put a curb on credit card practices and set limits to the fees that credit card companies charge consumers. It was created with consumers in mind, setting limits to the amount of credit that will be available to them in this recession “for their own good.”

As a result of the groundbreaking CARD Act, many banks and creditors have modified their business models by reducing potential risk to cardholders. They have dropped or restricted some borrowers with a poor financial history, tightened up credit lines, and are marketing less. Analysts predict credit limit reductions to have two main impacts for the collection industry.

One result of the CARD Act has been the setting of restrictions on the average size of accounts that are placed for collection. This, coupled with debtor’s behavior these past couple of years, where people generally spent savings and maxed out personal loans and home equity, raises eyebrows and concern, because for many consumers, credit cards are the only short term credit that is available to them at this moment.

Another giant impact of the CARD Act is a result of the provision that consumers are not able to pay off one credit card debt using a different card. While this may help debtors to be more fiscally responsible, this obviously has massive ramifications for the collection industry. Experts and leaders in the field hypothesize that the best way to deal with the enormous changes that have ensued is to remain flexible and to be creative. In addition to the same old telephone calls and collections letters, the internet can be seen as a good option for payment.

Experts also remind us of a few ideas that we, as collection professionals should keep in mind about the CARD Act. Extra payments must go to pay off the accounts with highest interest balances first. The CARD Act also gives consumers the ability to set their own credit limits that might be less than those set by the creditors, and marketing credit to college students and giving credit card access to people under twenty one will now be severely restricted.

Mallory Megan works for Rapid Recovery Solution and writes articles on medical collection agencies. This article, What Every Collection Agency Should Know About The CARD Act is available for free reprint.

Advanta Credit Card Scam

I sit at my desk completely frustrated with Advanta. I opened up a business credit card with them 3 years ago and made a purchase of $6500 to help build my business credit for Rapid Recovery Solution, my Collection Agency. I have paid more then the minimum every month, on time. November 2008 I noticed that my interest rate seemed a little high. No where on my statement did it say the actual interest rate so I called the company. After 10 min or so I get a live rep on the line and they tell me it is 36.1%. Are they kidding, this must be a mistake. I have over a 750 score and never missed a payment. They said they sent me a notice in Aug that they are doing this due to a change in there lending methods. It turns out this is the second time this year they did this. I went from 8.99% in Jan 08 to 18.99 in Feb 08 to 36.1% in Aug 08.

Now, being in the industry for over 10 years I know that I need to watch my credit. I look for charges I didn’t make and it is tough to scam me. I have seen it all but this takes the cake. They told me I am now at a high risk for default so that is why they raised my interest rate? That doesn’t make any sense. They should lower my rate if they think I will default on my credit card. How will an increase in what you are charging me keep me from defaulting. Luckily, I have the ability to pay off this card today but I want everyone to realize that these companies have you by the short-n-curly’s. Watch your statements and lookout for this scam.

FYI, In NY, the maximum interest rate is 30%. They are charging me more then the maximum allowed in my state. I will send a letter to the BBB, the NY Attorney General, the UT Attorney General and the Department of Consumer Affairs.

As a nation we are in deep trouble. If a credit card company can just raise my rate because they feel like it I am positive that 99% of their customers are also paying 36.1%. How many other credit card companies are doing this to innocent people? We need to fight back. I am going to tell as many people as I can.

Unfortunately, there is nothing we can do except payoff the card. I was told I am a high credit risk. I paid the bill in full after I realized the rate was so high and the next month I received another bill for more finance charges for about $255. I paid that bill in full. I just received another bill in the mail for $5.65 and my rate was changed to 37.99%. Another point higher.

Just for cookies and giggles I called again to see why the rate went up again and they said “Sir, you have been classified as a very high credit risk and as a company we can’t risk you not paying your bill with us.” I said “I just paid my bill in full with your company, I have never had a late payment with your company in three years, I have one mortgage on my house for $290K, 25 years left at a fixed rate of 5.375% and it is worth over $500k and almost zero credit card debt personally. I am in the fastest growing industry right now, CNBC expects the debt collection industry to grow at 25% a year for the next decade. What else would I have to do to receive a better rate?” The extremely rude lady said “Sir, you would need to send a letter to Santa Clause and maybe he can help you out.”

The Government should put a maximum rate in place for the next year or so on all credit card debt. If the credit card companies are truly worried about consumers defaulting on their obligations, wouldn’t it make more sense to lower the rate so we can continue to make the payments? By raising the rate, it only makes it harder to pay and more likely that a consumer will default. The credit card companies are preying on the weak right now hoping you don’t pay so they can pound you with the highest interest rate. When you do default, they now have a higher balance to sell to a collection agency. In my eyes, this is a crime.

The Government doesn’t care either. Instead of giving the banks 350 billion dollars, They could have sent $1151.98 to each US citizen to pay towards credit card debt. The banks still get the money but we the people get a little break on our bill. The average family of four would receive $4607.92 to pay off a credit card. They reason that the banks need the money so they can lend money again to us? Are they crazy? All the banks did was raise the interest rates on our cards and pocket the money without ever having to say what the money went towards. No accountability!

Now the geniuses in Washington are considering giving billions to the auto industry so they can produce more shit cars that we can’t afford. How about giving the money to everybody with a current auto loan so we can pay for the car we already have. The money would still flow to the banks and auto makers via we the people.

Good luck America, your gonna need a miracle.

I feel better now. I was very upset prior to writing this blog. I hope everybody reading this realizes that if it can happen to me it can happen to anybody.

John Monderine Rapid Recovery Solution, Inc.

John Monderine is the President of Rapid Recovery Solution, Inc. a Debt Collection Agency. If you need help getting your Accounts Receivable collected go to his Collection Agency website for a no obligation free quote. This article, Advanta Credit Card Scam is available for free reprint.

The Debt Collection Industry Today

The collections industry has grown so huge in the last couple of years. The reason for this is that collections and recoveries are usually outsourced business functions. It would be unfathomable for a creditor to handle retrieving debt from all of their accounts, so the creditors call the collections agencies.

But there seems to be a beginning of an enormous change taking place with the collections industry. The industry has grown to massive proportionas through the recession and seems giant. Rather than hire out more service providers, creditors are begining to lower the number of debt collection companies that they will work with, which requires the companies they originally hired to take on more accounts.The effects of this could change the way that the collections industry operates in a large way.

As the least effective workers are removed from these collection networks, certain debt collection agencies are going to suffer losses from their most important clients. Additionally, creditors will have less reason to work with companies that have a reputation for being unethical. The financial effects of this will cause these agencies to suffer, and company value will also fall with some owners that are forced to sell their companies in distress.

As this happens, the best workers will see more less competition, more potential job growth, greater leverage on contract terms, better revenues, and improved profitability.

In the debt buying market, the same type of change is also occuring. Rather than calling on more debt buyers, some creditors are lowering the number of companies they approach for selling the accounts.

Less functional, smaller debt buyers will experience less of a chance to buy from these issuers. Here again, a condensement within the primary debt sales market will increase. Recovery executives within credit businesses will be making the same kind of choice more and more, picking concentration within their vendor networks rather than diversification.

Rapid Recovery Solution is a New York collection agency. Click here to get your own unique version of this article with free reprint rights.

What Is A Collection Company Pt. 2

Depending on how the person who owes money reacts to the demand will have a large effect on what additional notices (if any) the collections company will pick from its library. Voluntary resolution (e.g. making payment arrangements and/or partial payments) might result in letters with a gentler tone. Deceptive or belligerent reactions from the debtor might result in a more threatening tone.

Collectors attempt to create a sense of urgency, to try and collect the debt within the shortest amount of time. This hopefully will encourage the debtor to prioritize that particular obligation. Deadlines may be set, such as, Pay this amount within 10 days. There may also be threats, such as, …Or we will proceed with further collection attempts. But most of the time, if a debtor fails to meet the deadline, all that will happen is that yet another dunning letter will arrive, making the same basic demand. The & further collection action usually just means more dunning letters.

Collection letters will always coax the debtor to call the collection company directly via the telephone. In the case that the debtor does not call within thirty days, then a collector will typically try to contact the debtor again.

What are the phone calls like? Individual telephone collectors might be assigned a group of accounts, and spend their entire workday, every day, calling them. Their rigorous follow up can be attributed to performance evaluations and personal commission payments. The amount of a collector’s own paycheck is dependent upon how much money s/he extracts from debtors. Between that factor, and the relentless confrontations, this is a very high-stress job, with high employee turnover.

If a debt collector calls and reaches someone other than the debtor (e.g. a friend), s/he is legally prohibited from letting them know that this is an attempt to collect a debt. Each state differs but this may or may not include the debtor’s spouse. If the collector reaches an answering machine or voice mail, s/he will often leave a FDCPA approved message, but they are not permitted to give details for the call, because someone besides the debtor may hear it. The basic message goes something like, “I am calling for Jane Doe. It is very important that you call me back. My name is JR Rooney, and my number is 1-631-999-9999.” S/he will typically sound rather unemotional and stiff. Collection companies may be required to provide a phone number which is free for the debtor to call. They also may attach their toll free numbers to caller ID equipment which instantly identifies and logs the phone number the debtor is calling from, in order to call the debtor at that number at a later date.

Rapid Recovery Solution is a credit debt collection agency. Click here to get your own unique version of this article with free reprint rights.

Collections Industry To Undergo Transformation

The collections industry has grown insanely in the last couple of years. The reason for this is that collections and recoveries are for the most part outsourced business functions. It would not be possible for a creditor to handle retrieving debt from all of their accounts, so the creditors call the collections agencies.

But there seems to be a beginning of an enormous change taking place with the collections industry. The industry has grown and grown through the recession and seems huge. Rather than hire out more service providers, creditors are starting to lower their number of agencies that they will work with, which requires the companies they originally hired to take on more accounts.The effects of this could change the way that the collections industry operates in a large way.

As the worst employees are removed from these collection networks, certain collection agencies are going to lose their most vital clients. Creditors will also have less reason to work with companies that have a reputation for not following regulations. The financial effects of this will cause these companies to suffer, and company value will also fall with some owners forced to sell their companies as a last resort.

As this happens, the best workers will see more and more potential job growth, less competition, greater leverage on contract terms, better revenues, and improved profitability.

Within the debt buying market, the same type of shift is also taking place. Instead of calling on more debt buyers, some credit issuers are lowering the number of companies they approach for sales.

Smaller, less capable debt buyers will see less opportunities to buyfrom these issuers. Here again, concentration within the primary debt sales market will increase. Recovery executives within credit businesses will be making the same kind of choice more and more, selecting concentration within their vendor networks over diversification.

Mallory Megan is employed by a debt collection company. She also writes articles on business, finance, the credit industry and collection agencies.

All About Bankruptcy Court

In a nutshell, bankruptcy cases are voluntary or involuntary. The vast majority of cases will be voluntary. In these, debtors (the people who owe money) petition the bankruptcy court. With involuntary bankruptcy creditors (the people who you money to) file the petition in bankruptcy. Involuntary petitions are typically rare and are sometimes used in business situations in order to force a company into bankruptcy so the creditors can enforce their rights.

The beginning of a bankruptcy case starts with an estate. An estate is what the creditors scope out to see if there is anything they want. The estate is made up of all of the debtor\’s property interests at the time that the fillings are commenced. Not all property will be up for grabs. Some of it is subject to certain exclusions and exemptions.

If you are married, the estate may include certain community property interests of your husband or wife, even if the spouse has not filed bankruptcy themselves. The estate may have extra items including property acquired by will or inheritance within one hundred and eighty days after the case begins.

For the purpose of federal income taxes, the bankruptcy estate of someone in a Chapter 7 or 11 case is an entity that can be separately taxed from the debtor. The bankruptcy estate of a corporation, partnership or other collective entity or estates of individuals filing for Chapters 12 or 13 is not a separate taxable entity.

In each judicial district, bankruptcy judges comprise a unit of the United States District Court. The judge will be appointed for a term of fourteen years by the United States Court Of Appeals. The District Courts have subject matter jurisdiction over bankruptcy matters. But each district may refer bankruptcy matters to the Bankruptcy Court. Most district courts have an order so that all bankruptcy cases are handles by the Bankruptcy Court.

Mallory McGuinness works for a debt collection company. She also composes articlesabout finance and business, consumer spending and collection agencies. Get a totally unique version of this article from our article submission service