For many, the idea of a debt going to collections is something they know is inherently bad, but may not know what this process actually entails. Essentially, this means your debt has been sold to a third-party debt collection agency. Having a debt in collections can not only impact your credit score, your ability to qualify for loans, and your overall financial standing, but it can also lead to aggressive attempts by the collector to recover the funds owed. However, you still have a number of important rights under both federal and California law. The following blog explores what you should know about this process and why connecting with a San Diego consumer lawyer is imperative to protecting your rights during these complicated matters.
What Does It Mean When a Debt Enters Collections in San Diego?
If you are in debt and you receive a notice that your debt is in collections, it’s important to understand what this means. Typically, when you owe a creditor, they will make numerous attempts to recover the money within the thirty days following your last missed payment. However, if their attempts to reach you have gone unanswered, and the debt remains unpaid, they will likely sell your debt to a third-party collection agency. This process is commonly referred to as the debt collection process, and it can vary based on the type of debt you owe, the collector, and how long the debt has been outstanding.
Third-party collection agencies often buy debts for pennies but will do everything possible to recover the full worth of the debt owed.
What Happens After a Debt Is Sent to Collections?
- The original creditor may close your account and report it as delinquent
- The debt may be sold, transferred, or assigned to a third-party collection agency
- The collection agency will begin contacting you over the phone, through email, or through the mail
- The account may appear as a collection account on your credit report
- Your credit score can decrease considerably depending on your account history and standing
Why Are Debts Sent to Collections in California?
In San Diego County and throughout all of Southern California, a debt is generally sent to collections following a period of non-payment. However, it is also possible that errors can result in the improper transfer of an account to collections. Regardless, understanding why and how this happens can help you determine if the debt in question is valid, which will ultimately shape how you respond to these matters.
Common Reasons a Debt Goes to Collections
- Missed payments over an extended period of time (generally between 30 and 180 days)
- The creditor cannot contact you to resolve the outstanding debt
- The original creditor chooses to sell the debt to recover a portion of the loss
- Administrative or billing errors may render a payment as unprocessed
- Outdated or erroneous billing information can result in miscommunications
When a Debt Should Not Be In Collections
- The debt has already been paid in full
- The account was billed incorrectly due to a payment processing error
- Insurance or third-party payments were not properly applied (common with medical bills)
- The debt does not belong to you (credit mix-up or identity theft)
What Are My Rights If My Debt Is In Collections?
If you owe a debt that has moved to collections, it’s important to understand what you are up against. Debt collectors have a reputation for being notoriously aggressive and going to extreme measures to collect the funds they are owed. As such, it’s imperative to ensure you understand the rights in place to protect you as a consumer. Unfortunately, many who owe a debt believe that because they are in debt, they have no rights, which is far from the truth.
Your Rights Under Federal Law
- The Fair Debt Collection Practices Act (FDCPA) protects consumers from abusive debt collection practices by third-party collectors
- California’s Rosenthal Fair Debt Collection Practices Act expands these protections to prevent original creditors from engaging in abusive behaviors as well
- You have the right to request a debt validation notice within 30 days of the first contact from the creditor
- You can dispute the debt and request an investigation
- You can request that the collector cease contact
Prohibited Debt Collector Behaviors
Debt collectors must follow strict rules regarding their behavior and how they can interact with consumers when attempting to collect a debt, as per the Fair Debt Collection Practices Act (FDCPA). This act outlines the unacceptable actions and allows impacted consumers to file a claim to recover statutory damages for violations they are subjected to.
- Calling a debtor repeatedly in a short period of time
- Calling outside of acceptable hours (before 8 a.m. and after 9 p.m.)
- Using vulgar and threatening language
- Misrepresenting their status as a debt collector (pretending to be an attorney or law enforcement)
- Threatening to sue you if they have no intention to do so
- Disclosing your status as a debtor to others
- Lying about the amount you owe
Contact an Experienced San Diego County Consumer Protection Attorney
When you owe a debt that has moved to collections, it’s important to understand your rights. Generally, you’ll find that if you are subject to harassment in San Diego and the surrounding Southern California communities, connecting with an experienced attorney is in your best interest. At Barthel Legal, we understand how frustrating it can be when you are repeatedly harassed over funds you owe, especially when this harassment violates federal rules. Contact us today to learn how we can help you in these matters.
