Don’t be intimidated if you have received a collections letter from an agency or attorney. First and foremost, you should know a collection letter is of two types:
- It can be a friendly one: Welcome to XYZ Collection; we look out for options to manage your debt.
- It can be a threatening one: If you don’t pay the balance in 15 days, we will take action and file a lawsuit to collect the debt.
You can receive any of the two; the collector’s objective is the same, the extract payment from you.
The settlement of debt with a debt collection agency or an agent means that your main creditor is tired of their attempts to collect the debt on their own. Before involving a collection agency, they may have sent you several letters and made calls.
Once your creditors come to a point where they know their attempts will no longer help them get their payment, they will either sell your account to a third party or appoint a debt collection agency to make attempts for collection.
Collectors can be one person or a company. But, they should follow the FDCPA (Fair Debt Collection Practices Act) and PFCEUA (Pennsylvania Fair Credit Extension Uniformity Act). These are regulations to safeguard consumers from the overburdening and threats of debt collectors, such as making phone calls after 9 pm or threatening to take actions that are not permissible in collecting a debt, false proofing themselves as government bodies, or interacting through a postcard.
The company or debt collector needs to show themselves as a debt collector orally or through a phone call, or in writing.
Can a collection letter lead to a court situation?
If you received a collections letter, it could be the first step to entering a lawsuit filed against you for debt collection in some time.
A collection agency from where you have a collections letter will turn the file to a lawyer if they fail to get a payment from you. The attorney will send their collection letter to you before filing a lawsuit. The letter should adhere to the FDCPA and PFCEUA regulations on debt collection.
After the lawyer files a lawsuit, your options get restricted to deal with it. This is why taking action promptly as soon as you receive a collections letter is important.
Your very first step could be to hire an attorney who can understand the dos and don’ts of the case and answer the collector regarding the payment. Your attorney can negotiate for you if you cannot pay the whole amount. If the debt collection agency has threatened or tormented you by the wrong means, your attorney could file a lawsuit against them.
Regardless of your situation, you should choose a reliable and reputable firm. They have the best team to support you and will help you with the right strategy and legalities for dealing with debt collection.