Dealing with a Collection Agency

Debt is a situation where one party owes another party a return; be it in monetary terms or in another form like a favor rendered.

Consider this, you have a business idea that you are certain will work and have raised over half the capital but are out of ideas on where to get the remainder. The obvious choice is to ask for a loan which is the roses part, then comes the thorn part; it is time to pay up.

The creditor you owe contracts a debt collection agency to follow up on the promise.
There are two types of collection agencies; first party and third party agencies.

First party are usually directly related to your creditor example if you borrowed money from a bank they have a subsidiary that deals with debt collection because they loan out money on a large scale and frequently. They maybe argued to be the better half of the two when it comes to collection because they are they economical and have the company’s image in mind even as they claim what belongs to ‘Caesar’

Third party agencies are contracted to collect on behalf of the creditor and get an agreed upon fee. These, unlike first party, are subject to legislation which governs them.
The fair debt collection practices act aims to, among other things; define rights of the debtor and prescribe penalties for violating those rights. Some of the rights bequeathed to the debtor are:

  1. The collection agency is not allowed to contact you more than once unless providing additional information or correcting erroneous past information.
  2. A right to be represented by an attorney in which case the agency is not expected to make any more direct contact with you; they do it through your appointed legislator.
  3. The creditor cannot collect any amount including interest other than that which was agreed upon in the original agreement; reminiscent of when Shylock was ordered to get his pound of flesh without shedding blood in William Shakespeare’s Merchant of Venice.

For a debt to be valid the agency on creditor’s should; within five days after the initial contact with a consumer in connection with the collection of any debt.

Send the consumer a written notice containing the amount owed.

A statement of the name of the creditor to whom the debt is owed.

A statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.

Information is power so consider yourself empowered to deal with the next collector who comes for their pound of flesh. My advice; avoid bad debt all together. Bad debt is the worst poverty.