If you are unable to make your regular payment or keep an arranged
payment, here is what you can expect:
The original creditor will keep the debt for a predetermined
amount of time. This could be up to 108 days.
The debt will then go to the creditors "in-house collections." You
will be notified of this change and should be given notice of
your options to resolve the matter. At this point your credit
report will reflect your late payments in increments of 30, 60,
or 90 days late. If the in-house collections is unable to collect
the debt, your account will be forwarded to a third party collector.
A third party collector is a company, attorney, or anyone other
than the original creditor. Because debt collectors work on a
commission basis they may be more aggressive than the in-house
collector. If you feel you are being harassed refer to the Fair
Debt Collection Practices Act.
Generally, if an attorney is the third party collector your
time to negotiate a repayment plan may be shorter because they
are in a position to file suit much quicker.
Third party collectors are generally not permitted to tell
anyone other than you and your attorney that you owe money. They
may contact your friends or family only to learn where you live
or work. They can only do this one time.
Within five days of first contact the third party collector
must also contact you in writing confirming the amount you owe
and the name of the original creditor. You will have anywhere
from 20 to 30 days to reply. At this point your credit report
will list the debt as in collections.
After this point, if no arrangements are made or previous arrangements
are not kept, the third party collector will send a notice of
a court date to file a judgement against you.
The above information should be understood to be a general
discussion of the subject matter and DOES NOT constitute
a legal opinion about the situation. For further information
please consult a qualified attorney.
