Personal debt collection attempts to recover as much money as possible a debtor owes to an individual or entity (creditor). Below is a guide from Massachusett Debt Collection Attorneys, a reputable law firm, to help you legally collect as much of your owed money as possible.
Legal Framework
The FDCPA is a United States Federal law that sets restrictions and guidelines that govern how creditors should collect money owed to them. It highlights practices and laws that a professional collecting body must follow for fair treatment of all parties. It is key to understand these guidelines to ensure your collector follows them.vc
Prohibited Actions
While being aggressive is part of a collections law firm’s tactics, some actions could land them in trouble and make it legally impossible to collect your money.
- Pretend they work for government agencies– The FDCPA prohibits collectors from pretending they are from government agencies, including law enforcement. It is also illegal to pretend like they work for consumer reporting agencies.
- Harass debtors– Collecting law firms are prohibited from threatening debtors with harm, violence, or arrests. They should also not use profane or obscene language.
- Publicly shame debtors– It is illegal for collecting law firms to publicly humiliate debtors to persuade them to pay their debts. While they can contact third parties to track debtors down, they cannot talk about the loan but only obtain information like phone number and employment location.
- Misleading representation– Collectors should not use deceptive or misleading statements to get debtors to pay. They should only relay accurate information like the amount owed, non-payment consequences, and the nature of the amount due.
Communication
Proper communication between debtors and creditors is essential, but some stubborn debtors can make that challenging. Regardless, there are communication guidelines every collector must adhere to.
- Time– The FDCPA restricts collectors from contacting debtors before 8:00 am and past 9:00 pm. They are also prohibited from calling debtors repeatedly if they do not answer.
- Place– Collecting law firms are prohibited from calling debtors at work if the employer does not allow personal communications.
- Attorney representation– If a debtor has an attorney and lets the collector know, the only communication should be through the attorney.
- Social media plus other electronic mediums– Collectors are not allowed to address debtors publicly via social media but can message them privately. If the collector wants to contact a debtor via email, text, or other electronic mediums, there should be a simple method for the debtor to opt out.
Steps Before Pursuing Personal Debt Collection
Before approaching a collector, you should take the following steps to ensure you comply with legal requirements, understand your debtor’s situation, and examine potential repayment alternatives.
Review The Agreement: Review the loan to verify the amount owed, accrued interest, default provisions, and other fees and terms. You should also verify your debtor’s information, including their current phone number, address, and email, to avoid communication hardships.
Understand Laws: Understanding the laws surrounding collecting dues ensures you avoid legal issues. Ensure you follow up on them to remain updated on any changes.
Review Your Debtor’s Situation: Sometimes, debtors find it difficult to repay arrears because of changed situations. Ensure you assess their financial situation to understand whether they can still repay you according to the current terms. You should also check if they have filed for bankruptcy. That can help you determine the best strategies to collect the balance or negotiate new realistic terms.
Attempt To Collect: If your debtor is in a position to repay, initiate an attempt to collect the balance by sending a demand letter. Ensure you indicate the balance, repayment date, and consequences. You should also try to call them, but do not call repeatedly to ensure you remain on the legal side.
Consult Professionals: Speak to professionals, like a collecting attorney, and ask for the best way forward. They can also educate you on some effective tips to help reclaim your balance.
Effective Communication With Debtors
The communication between you and your debtor determines if they will pay you and how your relationship will be afterward. Proper communication also helps maintain professionalism and legal compliance. Below are some tips for effective communication with debtors.
Choose The Proper Medium: Choose an appropriate medium where you and the debtor can easily reach each other. If you update your contact information, ensure you update the debtor. Whether written communication or phone calls, ensure you have a copy of whatever you discuss. That way, you both remain updated about the balance status and have evidence in case you go to court.
Be Transparent: When communicating, be clear about the debt, including the pending amount, charges, repayment methods, and deadlines.
Have Respect: Respect is major when maintaining professionalism between you and a debtor. A respectful tone also plays a major role in building trust with your debtor and gaining their cooperation.
Be Empathetic: Understand your debtor and that financial situations can change. Avoid aggressive or judgemental language, which helps you remain within legal boundaries. It also helps create a good relationship that encourages repayment.
Follow Up: Following up with a debtor on your agreements is essential to maintain commitment and compliance. Send polite reminders when repayment dates approach and develop a system to track commitments and interactions.
Legal Tools And Remedies
Demand Letters: These are formal legal notices sent via an attorney to remind debtors about the payment. They include the remaining amount, terms, and a demand to pay within a certain time frame. They are essential documents that create a formal record of the loan, and you can use them as evidence in court.
Recall Letters: These are formal communications to the debtor indicating that you want your payment before the agreed maturity date. You can send one if the debtor violates loan terms or when they trigger certain agreed-upon conditions.
Mediation: This involves an unbiased third party that will help you and the debtor settle without going to court.
Settlement Agreements: These are agreements between you and the debtor, mostly involving reduced lump-sum payments or altered new terms.
Informal Negotiations: These are between you and the debtor, where you can directly communicate and discuss new repayment options, payment plans, and other options.
Asset Seizure: Based on your agreement, you can seize and sell some of your debtor’s assets, like a vehicle or real estate, to generate the balance.
Harness the Power of Legal Expertise for Your Debt Collection Needs
Ready to take control of your personal debt collection journey? For expert guidance, legal support, and effective strategies, reach out to Massachusetts Debt Collection Attorneys today. Don’t let outstanding debts linger – empower yourself with the knowledge and expertise you need to collect what’s rightfully yours. Contact us now and regain control of your financial future.