Honest Collection agencies will sometimes accept less than the full balance to settle your debt

Don't let Aggressive collection tactics scare you into paying trumped up charges you don't legally owe

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Greedy money changers buy up slow-paying accounts from banks and credit card companies for pennies on the dollar and then try to collect the full amount from you

Debt buyers train their attack-callers to verbally intimidate and bully their victims into giving out credit card and debit card information and setting up post-dated checks and sure-pay payments that can end up destroying your banking privileges. Sometimes they straight out lie to you and say they have arrest warrants and that they are sending the Sheriff (completely and knowingly false information that is even CRIMINAL under some state and federal laws). Arizona state law provides protections against this kind of abuse through its Consumer Protection laws enforced by the office of the attorney general.

Before you make offers to settle, make sure you are dealing with the creditor that actually has the right to collect the debt

If you know for a fact your payment on a debt is late or might be in default, it's always better to verify you are dealing with legitimate collectors and decision-makers who have legal authority to resolve the matter completely and finally, before entering into a settlement. Law-abiding collection agencies do not threaten anything when they call you. Legitimate, well-managed banks, credit unions and credit card companies have systems in place to ensure their collection departments do not violate Fair Debt Collection Practices Act rules designed to allow them to go about collecting their accounts, without harassing or intimidating borrowers excessively

When you dispute the amount that's being collected, it is extremely important that you make a record about your dispute, so you can enforce whatever settlement you manage to reach

If you enter into a settlement agreement that allows you to pay less than you really, truly do owe, if you are not really disputing the amount they claim you owe, or the manner in which it's being collected, there's nothing to prevent them from coming back later to collect the rest of it. The Pre-existing Duty Rule basically stands for the idea that if you owe a debt, fair and square, and you haggle with the creditor until they let you pay something less than the full amount you owe, you still owe the balance, since the creditor is really only getting something they're already entitled to (your payment). Sometimes, you don't even find out how they are treating the amount you've negotiated off the balance until months or years later. A creditor might forgive the balance and send you a 1099C, which could cause you to owe state or federal income tax. If they agree to let you pay part of the debt, and pretend to write-off the rest, you might see it come back years later as zombie debt.

Legitimate debt collection agents are people just like you and me, they know you have rights and they will be firm but fair and compassionate (it's just a job, nothing personal)

Unfortunately, for every legitimate, law-abiding debt collector, there seems to be at least three fraudulent, mean-spirited, bottom-feeders who enjoy making someone on the other end of the phone line feel bad. If the caller wants to engage with you on issues about your character, reputation, health, marital status, employment or the performance of your business, you are probably dealing with an unregulated, unsupervised, out-of-control, rogue collector and you should end the call. It's not worth elevating your blood pressure and ruining your family time. In the end, the caller's goals are perverse and their training is deficient. Tragically, if you go to the trouble of reporting them to authorities, by the time the authorities attempt to locate them, they have collapsed their temporary telephone and payment processing facilities and re-created their corporate identities. Make no mistake, you may be dealing with hardened criminals.

How to tell the difference between scam artists and abusive collectors and legitimate, well-meaning collectors who follow the law

EXAMPLES of Bad Guys tactics: Give out your information to others they might contact trying to reach you (the good guys will rarely contact you anywhere other than your home phone). Contact you before 8am or after 9pm or contact you at work once you tell them your employer prohibits personal calls. Curse at you or threaten violence, arrest or confiscation. Bad Guys frequently won't completely identify themselves during the call, won't provide mailing address but insist on getting payment by card or by electronic check. Claim to be lawyers or affiliated with lawyers but won't give you the name of the attorney or state where the attorney is licensed. Refuse to send you verification like a simple fax or email that reflects the amount of the charges and additions, who the creditor is, and options for how you can pay (by mail, credit card, etc).

You don't necessarily need an attorney to settle a debt that is mostly undisputed. Before making a final agreement, determine whether the settlement will resolve your biggest or most burdensome debt problems, or it would be a mere drop in the bucket

If you estimate the amount you think you might be able to get the creditor to accept, then confirm that you will be able to pay it, and keeping in mind that there may be consequences for the amount you're getting knocked off the balance (there might be tax consequences and the balance might come back to haunt you later in the form of zombie debt), before you write that check try to put that one account into perspective with your overall debt situation. Will that settlement alone put you back on solid footing ? Is there another aggressive collector waiting in line ? Are some debts going to progress to a law suit ? Can you afford to miss a car payment or utility payment in order to settle that debt ?

If settling one debt just puts a bandaid on much larger, deeper debt problems, it makes sense to look into bankruptcy, at least to find out your options

The natural course of events when you can't pay debts as they come due is for the debts to grow. Interest, late charges, collection fees, attorneys fees and court cost easily increase simple, everyday accounts by 25% within a period of six months following your initial failure to pay. And debt problems burden you with not just the additional cost of credit, but also with what can be a profound loss of quality of life for you and your dependents. Collection calls and letters, process servers and investigators, involuntary wage garnishment, bank account freezes, liens against your real estate, even Sheriff's sales can accompany serious debt problems that are allowed to get out of control.

Legal Protection against Unlawful Debt Collection Practices and Bankruptcy Protection are Provided Under Federal Law applicable in all Fifty States and available to everyone in the United States

Debt problems affect everyone from the super rich to subsistence farmers in our nation's fertile midwest. Sometimes the lows level out the highs and vice versa. And sometimes even the super rich hit a brick wall with creditors. In order to ensure each of us has a chance to retain the most basic assets and financial resources, and to closely monitor the debt collection and payment process for those who need court protection from creditors, the United States Bankruptcy Court has jurisdiction over creditors nation-wide and the function and purpose of bankruptcy laws is to ensure orderly, fair treatment of all the parties to credit agreements and conform the conduct of debtors and creditors alike. Bankruptcy is not a get out of debt free card. It is a mechanism to guarantee that honest debtors and honest lenders can survive a breakdown, a downturn in the economy, a health crisis or business failure. If arrangements can be worked out under court supervision, sometimes bankruptcy cases are simply dismissed and soon forgotten. Other times, an honest debtor deserves a fresh financial start.

Debt Negotiation and Settlement may provide a solution for Your Debt Problems. Bankruptcy is an Option you should understand fully. In the end, it might be the best option for you and your family

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