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The Dirty, Rotten Tricks of Debt Buyers!

Michigan has a statute of limitations on debt collection of six years (with certain, limited exceptions).  Say you have a balance on a credit card, fall on hard times, and six years goes by without a) you making a payment on the account, or b) the creditor filing a lawsuit against you.  Under Michigan law, you now have a defense to any future debt collection lawsuits they might be thinking of filing!  If you're sued, and you timely and appropriately assert that the statute of limitations has passed (the "this debt is time-barred" defense) in your answer, you just may well win your case!

But there's a catch ...

If the creditor can convince you to pay something - anything - on that old debt, the six-year period starts all over again!  They know this, and they count on the fact that you probably don't.  So, they try to trick you.  All of the sudden they're nice to you. They play on your emotions.  And, they pander to your sense of right and wrong. 

This is how they do it ...

Check out the notice one of our clients recently received in the mail, below.  Did y u forg t somethi g?  Cute, right? 

This client lost her job in 2009, and has suffered from major medical issues since.  Because she hasn't been able to, she hasn't made a payment on this debt since November 2009. She lost her house, and although things are starting to look up, she's struggled every day since then. Isn't it great that they agree that our client deserves a second chance?  That might be one thing Savage Legal Group, PC and Midland Credit Management, Inc. agree on.

But as to this client, this debt is time-barred. MCM can't sue her, and they can no longer report this on her credit report. Note the "charge-off" date on page 2.

So, what happens if our unwitting client calls them up and accepts one of these "generous" options so that she can "put this debt burden behind her"?  After all, she does want to regain her financial freedom! 

We won't hold you in suspense. If our client pays these debt buyers anything in response to this "offer," she'll be back on the hook for the full $9068.58 balance!  If she signs up for Option 2 or Option 3, and then misses a payment, they can and likely will sue her.  And that doesn't sound much like "putting this debt burden behind her" or "regaining her financial freedom."

Unless your financial situation has dramatically improved AND your conscience is really bothering you (because you never paid Citibank), don't fall for this dirty, rotten debt-buyer trick!  Put this "offer" in the circular file, where it belongs!

One final note: we added the highlighting to the CFPB-required notice.  We are quite confident that MCM would never deliberately draw your attention to that language!

 

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Debt Collectors are Calling Me. What Should I Do?

No one likes to receive a call or letter from a debt collector.  But if they're calling you, or worse yet, they're calling your family, your neighbors, your employer, here's what you do. 

First, understand that you have rights under both state and federal laws.  

Second, follow the advice of the Consumer Federal Protection Bureau, and take all of these steps if and when contacted:

1. Don't divulge any information!  Again, DON'T DIVULGE ANY INFORMATION!  If the caller is legitimate, he/she shouldn't need any additional information from you, including your phone number (they called you, right?), your address, your employer, where you bank, etc. Divulging information will only assist the creditor in suing you, or if they've already done that, in garnishing your wages, your state tax refund or your bank account.

2. Get identifying information from caller, and if he/she refuse(s) to give it to you, hang up! There are many, many scammers out there, just fishing for information! But even the legitimate collectors can be (and usually are) rude and pushy, and we know you might feel a bit guilty. Understand that they're trained to play on that. But also understand that employees of legitimate collection agencies have no problem divulging their own names, along with the name of the agency they work for. Get a mailing address, too, and a return phone number.  If they're being rude or pushy, politely tell them that you're not going to respond to their questions unless and until they give you all of this information.  DON'T BE INTIMIDATED!  

3. Make them tell you what they're calling about.  Say, "I'm willing to discuss this with you, but I need some information from you first." Then, demand to know, a) The name of the original creditor; and b) the amount they believe you owe them.  REMEMBER, you're in listening mode right now.  DON"T DIVULGE INFORMATION!

4. Thank them for their call, but tell them you're not about to make an immediate payment. Tell them you need to check your records first. Then, terminate the call. If you have to, simply hang up.

5. While it's fresh in your mind, make detailed notes about everything that is said.  Also, before it gets overwritten, note what is displayed on your caller ID, as well as the date, time  and duration of the call. 

6. Devise a strategy.  If the debt is legitimate, understand that you're likely going to have to deal with it, one way or the other. Worst case, you might be sued.  But even in that event, you have options. Understand, too, that you might have defenses, that if not asserted, you might inadvertently and unwittingly lose.  For example, making a payment on time-barred debt restarts the running of the statute of limitations.  All that being said, if the debt is legitimate, and you have no defenses, a proactive approach is probably best.  For example, if you have other debts, and you know that you won't be able to dig out within the next couple of years, then filing for bankruptcy can afford you the fresh start you need. Investigate that option - it might prove to be better for your credit score, and your personal bottom line, in the long run.  On the other hand, if this is the the only debt you're concerned with, then perhaps you can work out an affordable payment arrangement with the creditor before they resort to litigation.  

Finally, understand that regardless of which route you take, you don't have to suffer the constant collection calls and you can insist that they stop.  Let us know if we might be of assistance, whatever your strategy might be.

Beware of Collection Scams - Especially After Bankruptcy!
 Lady giving her credit card number to a collections scammer calling on the phone.

Lady giving her credit card number to a collections scammer calling on the phone.

A former bankruptcy client called the other day - a single mom, struggling to work and raise her young kids.  She sounded scared, but she told a story I've heard so many times before.  She'd just hung up with a bill collector, who told her that she owed money on a loan from 2010, and that if she didn't immediately pay, she would be arrested later that day.  Fortunately, my client remembered me telling her that she should not pay any debt that was owed prior to the date she filed her Chapter 7 case. Instead of giving the guy her debit card number, she wrote down his name and number, and called me.

There is a whole lot wrong with this phone call:  1) a creditor cannot threaten to have you arrested if you don't pay a debt, and in fact, it's illegal if they do; 2) a creditor can't refuse to validate a debt, as this one did; 3) a creditor cannot mislead you in any way; 4) even if this debt was valid, it was time-barred (so it was improper for the caller to threaten to sue my client, when he should have known he couldn't); 5) my client received a Chapter 7 bankruptcy discharge in 2015, so even if the debt was originally valid, it was a violation of the bankruptcy discharge injunction to attempt to collect it now.  The list goes on.

At any rate, I told my client to take a deep breath, and to trust me that this was a scam. I implored her not to worry, and not to pay this company anything!  To further ease her mind, I called the number back, and to my surprise, someone answered the phone.  However, when I identified myself as an attorney and simply asked for the agency's mailing address, the representative ("Diane Lane?") said that she wasn't authorized to release that information, and hung up on me!  

Reputable collection agencies do not act this way. Collection agencies that do act this way are subject to sanctions, and can be held liable for your attorney fees if you challenge them on their illegal behavior. If you receive a call like this, make careful notes on the details of the call - date, time, number, name given, and exactly what the caller said.  Then, call us to discuss what you can do about this inappropriate and unlawful creditor behavior.  

On behalf of this client, we're looking for you, Pittman, White & Associates, at (515) 309-2177.  If you actually exist, and we manage to find you, we'll be addressing the way you harassed our client!