Overview of Debt Collections
Due to the high cost of litigating debt collection lawsuits, many consumer creditors hire independent debt collectors to attempt to collect payment by informal methods, such as letters and telephone contacts. Typically, the collector will receive a share of any money collected. This creates an incentive to use whatever means are feasible to persuade the debtor to pay. Unfortunately, these methods can sometimes degenerate into harassment (such as -late night or repeated telephone calls), false threats of lawsuits or arrest, threats to ruin the consumer’s credit rating, embarrassing communications to employers, friends, or neighbors, or even physical intimidation.
Contrary to popular belief, most defaults on consumer credit are not due to a mere unwillingness to pay, but rather to events over which the debtor has no control, such as loss of a job, divorce or an extended illness.- While the creditor and the debt collector have the right to attempt to secure payment, the law imposes limits on how far these practices can go