Legal Debt Collection Tricks

If a customer owes your local business money, it's hard not to feel angry, like you want to do anything possible to get your money back. But the days of going all out to collect on a debt are over.

The Fair Debt Collection Practices Act, designed to protect consumers from harassment or intimidation, sets firm limits on what you can do to collect a debt from a consumer. The federal debt collections law even prohibits practices that were once standard, and that you might not consider harassment at all.

As a local business, you have an even more powerful reason to be especially careful about legal debt collection issues. You have something much more valuable at stake than a lawsuit; your business's reputation in the community.

Legal Debt Collection Best Practices:

There are plenty of articles on the web that lay out in plain English what the Fair Debt Collections Practices Act says you can and cannot do. Just to give you some idea of the law's requirements, here are some of the biggest:

- No telling any third party about the debt (except collection bureaus, collection agencies, or the debtor's attorney).
- No calling on the telephone 9 pm - 8 am, or calling repeatedly in a way that is annoying.
- No postcards or envelopes that mention the debt.
- No threats to take actions you cannot or will not really take, such as seizing property, in the case of an unsecured debt.
- No misrepresenting yourself (e.g., "Hi! This is the Publisher's Clearinghouse Sweepstakes. May I speak to John?").
- No paying down the debt with payments the customer has directed be applied to other debts

Debt Collection--Some Tips for Dealing with Old Debt

The business of consumer debt collection has become very lucrative and the collection of "old" is on the rise. It would be wise to know your rights when it comes to getting collection calls for old debt especially debt that is excess of seven years and no longer appears on your credit record.

1. Be aware of the statute of limitations in the state you live and in the state the debt was incurred if they are different. If it has expired, the collection agency will have limited legal options.

2. You may want to ignore the call. If the statute of limitations has expired they have very little recourse and you have a lot to lose by negotiating repayment. Repayment of your debt could cause it to be relisted on your credit report again.

3. Write them a letter and send it certified mail. Do not admit to the debt. Once they have received the letter the law prohibits them from contacting you again.

4. Know what your rights are. A copy of the Fair debt Collection Practices Act or a copy of "Money Troubles" by Leonard will familiarize you with what your legal right are.

5. Watch your credit report. If you see something on your credit report that is incorrect, you can dispute it with the credit bureau. If the reporting agency or creditor can not prove that the information is correct, it will be removed.

6. If the statute of limitations is still current, you may want to try to work out a settlement with the agency. Negotiate with them and see what you can get worked out.

Knowledge is power. You will best be able to handle your debts if you know what your rights are and where you stand.