Should you Ignore Debt Collectors?
The question of whether or not to ignore debt collectors often comes up. If an initial contact was especially negative, consumers may be tempted to just ignore further communication and hope the whole thing goes away.
The statute of limitations for collecting a debt using the courts varies by state, In California, the statue of limitations is four years. What this means is that the clock starts on the statue of limitations when your payments on the account become overdue. In some states, the clock may also restart each time a payment is made on the account. So, in California, at least four years would have had to pass without you making any payment for the statue of limitation to expire. However, even if the statute of limitations has expired, you are still considered the debtor, and the collector can still pursue payment with you for the outstanding amount.
If you choose to ignore debt collectors, it is still important for you to watch closely for any mailed correspondence from the collector indicating that a suit is being filed. After the statute of limitations expires, the debt cannot legally be collected. However, if a suit is filed, and you do not appear in court or provide the requested paperwork using the statue of limitations as your defense, the court may rule in favor of the collector.
Another option to ignoring debt collectors is to hire a third party to negotiate with the collectors on your behalf, If you choose this option, you could hire an attorney who specializes in working with consumers who are struggling with debt issues. Alternatively, you might seek assistance from a nonprofit credit counseling agency. Either of these professionals can negotiate with debt collectors for you with the goal of developing a reasonable payment plan that fits your budget.
Regardless of how you choose to deal with your debt issues, if the debt is more than seven years old, you should contact the three major credit bureaus (Equifax, Esperian and TransUnion). The Fair Credit Reporting Act allows negative debt items to remain on your credit report for only seven years. When you contact the credit bureaus, you should identify the old accounts on your report and request they be removed. Disputes can be accomplished either online or through the mail. You will need a copy of your credit report from each bureau to complete the dispute.
While the Kaplan Group does not handle retail collections, we are experts in commercial collections. If you have delinquent accounts with your customers and you need professional assistance collecting these debts, the Kaplan Group is ready to help. The Kaplan Group is equipped with state of the art collection software, a well-trained, caring staff and its own in-house attorneys. No matter what your collection issues are, we know what to do to get the job done. Additionally,Dean Kaplan, President of the Kaplan Group has extensive experience in helping companies improve their in-house collection departments. He frequently visits clients and provides seminars on collection topics that are relevant to each their needs. Please contact the Kaplan Group for more information on any of these subjects.
About The Author:
Dean Kaplan is Principal at The Kaplan Group. Dean's expertise is widely recognized in the debt collection industry. His advice has been published in a number of industry newsletters such as Credit Today and InsideARM and he is a frequent speaker at industry events.