Debt collection is something that most people haven’t experienced. Most people can make their loan payments on time, and there’s no need for anyone to contact them for a collection of any sort. But those people who have experienced something like this know just how intimidating this can be.
The whole idea behind this is to scare the people who are in debt, and who are facing some additional financial problems, to do something to prevent things from being much worse for them. Therefore, they try to make people accept the fact that their property or items should be confiscated. If you want to learn more about this occurrence, be sure to pay a visit to this website.
Another thing they might want to pull on someone is saying that they are contacting a person and saying that they are acting for the credit card company. As you can presume, this is not possible. Naturally, they want to cause a shock effect and to make people do what they ask of them.
Now, we want to present you with how it is possible to beat junk debt buyers.
What are Junk Debt Buyers?
Before we can continue to talk about this topic, we need to provide you with an explanation of the basic concept. That’s why we want to shine a light on what a junk debt buyer is. We are talking about a company that has decided to purchase a debt that wasn’t collected before for various reasons.
But the commonest reason is when it has been marked as uncollectable by the creditor. When that happens, some companies are interested in purchasing these to try and collect them later. The commonest sorts of these that are marked as uncollectable are those that originate from automotive loans or retail accounts.
As you can presume, these uncollectable ones are usually sold for really low prices by the original creditor. So, junk debt collectors make an effort to amass the whole amount that’s owed. You would be surprised by hearing just how many of these companies are out there. According to some studies, there are more than 10k of them in the United States.
It is also crucial to understand how they are collecting the money they are owed. Usually, they try to make the collection of the complete sum work. If someone is persistent enough not to let them do that, then it is possible to knock down the price quite a bit. It all depends on how persistent someone is.
How To Notice the Shift?
Recognizing that some company has purchased your debt you are obligated to pay is not something that will give you a lot of headaches. In fact, this is quite an easy thing to perceive. Naturally, you have no way of knowing before someone you don’t know makes a call and makes a claim you owe them money.
As we’ve stated, those companies are trying to catch people off guard and make them do their bidding. For that reason, they will not want to have a long conversation with you about these things. Instead, they will just make threats and claims of this sort. But you shouldn’t be affected by what they say.
Do not get us wrong it is not that doing something like this is illegal. We can see that the methods they use are illegal. If you are not familiar with this regulation, you can find it in an act known as FDCPA. As we said earlier, the most important thing is not to believe that they represent credit card companies.
How to Protect Yourself?
When something like this happens, there are a couple of ways you can protect yourself. One of the most obvious ways to do that is to seek arbitration. There are several reasons why conducting this is a good and beneficial idea for you. However, we would like to focus only on those we believe are the most important.
The first one is that arbitration causes the cost of collection to be significantly increased for the company that poses as a debt owner. At the same time, we are talking about an informal procedure, which means that the party, or yourself, will have a better chance of representing the case from its point of view.
Another significant benefit is that this procedure will not be a part of the credit report of the client that asked for it. The final one we want to touch upon is that the company that purchased the document will not be familiar with arbitrators. Therefore, you can be sure that it will be completely private.
Why is it Effective?
This type of lawsuit is rather effective and cheap. So, if you decide you want to go by using arbitration, then you should be aware that this process is carried out by a private arbitrator. In most cases, you will see that the costs of this process will fall completely on the junk debt buyer company.
Besides that, it should be pointed out that even in cases when the client loses in front of the court or arbitration, all the costs would fall on the company. We mean, you can always try to find a proper way to settle this problem through an agreement with a company. But this is not going to be possible in each case.
But when the company is interested in making some compromise, then we would urge you to be as steady as you can be. What does that mean? Well, it means that you can make a move that could lead the debt to decline to less than 25% of the original sum. If this is not a good deal, we don’t know what is.
The Bottom Line
Overcoming the problems with junk debt buyers doesn’t have to be as challenging as some people may think. There’s an easy way to do this, through arbitration. In this article of ours, you can see this procedure from the inside out.