Whenever one takes any loan from a
financial organization, it is obvious that the debt should be repaid within specific
period of time. However, among these people, there remain a few who cannot
repay their loan amount. Therefore, their debt accounts get labelled among
defaulters. Under such circumstances, the loan offering company employs people
to collect remaining debt from these defaulters. These people are known as debt
collectors.
Needless to say, we live in a society
with different kinds of people having different financial backgrounds. Among
them, there are some who support their daily needs with ease, owing to strong
financial capacity. However, there are also people who are not gifted with
strong economic background. These people keep hunting for monetary assistance
to fulfill their dreams. Hence, they are forced to depend upon the amount
provided by financial companies. In such cases, few fail to repay the amount
within specific time period. Here lies the importance of debt collectors who
are assigned the role to get back the loan amount.
Once your account is marked defaulted,
the debt collectors will begin to harass you in order to collect the remaining
loan amount. In such circumstances, they usually create unwanted situations to
extract the residual debt from your pocket. During this process, these people
make use of unpleasant methods to get back the defaulted sum of money from
debtors. Thus, the life of defaulters gets disorganized.
Keeping these in mind, the federal
government has implemented the Fair Debt Collection Practices Act for
protecting bad debtors. The debt collectors need to maintain guidelines for
protecting defaulters from harassment. Here are they.
- Debt collectors need to identify themselves prior to communication with debtors regarding the defaulted loan.
- It is essential to provide complete debt details to the debtor before asking for the remaining loan amount.
- These debt collectors have to offer 30 days notice for the remaining debt collection within a period of 5 days from the initial communication.
- When heading to file a lawsuit against the defaulted debtor, one must initially register a case at the place where the consumer currently resides.
In short, it can be said that federal
law has managed to tame the nuisance caused by these debt collectors
through the debt collection laws and guidelines.
Author: Aalina Jones
Author: Aalina Jones
An experienced finance writer, she offers smart suggestions on
financial topics
4 comments:
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Debt collectors try different forms of harassment methods to recoup the loan amount and unfortunately, those guidelines listed above are only good on paper. collection agencies los angeles
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