Many people who face the constant stress of harassing phone calls, intimidating collection letters, and court summonses often feel overwhelmed that there is no way out of the constant debt struggle. Collections often result from some negative life changing event beyond the person’s control, whether that is the loss of a job, a divorce, or a death in the family. When faced with this extreme stress, many people turn to bankruptcy attorneys to file bankruptcy. This, however, is daunting for many people. Filing bankruptcy feels like defeat to many debtors, and can be a costly and frustrating endeavor.
What many debtors don’t know is that much can be done short of bankruptcy to give clients a fresh start. More than half of all debts are regularly bought and sold on the open market. In other words, your debt has likely been purchased (often for pennies on the dollar) by creditor after creditor in an attempt to collect the debt. Each time a new creditor purchases the debt, the creditor will aggressively attempt to contact the debtor and reach an agreed payment plan, usually for some agreed payment per week or per month. A majority of these debts are not collectable. Creditors purchase these collection files in large bundles, for a fraction of what the debts are worth, with the hopes of actually collecting on a small percentage of all the purchased debts.
When creditors purchase these debts, because they are in such high volume a vast majority of these debts have some documentation deficiency which may prevent or preclude the creditor from being able to collect the debt in court. Unless the validity of the debt is challenged by a debt collection defense attorney, many creditors will obtain default judgments against the debtor. In fact, approximately eighty percent (80%) or more of these debts will result in default judgments. (A default judgment is a judgment rendered against a debtor for his or her failure to appear in court.) Once a default judgment is obtained, the creditor will then move for contempt, body attachment (arrest for failure to appear) and garnishment of wages or bank accounts.
However, a debt collection defense attorney has many tools at his or her disposal to make the debt more difficult (and expensive) to collect. Many creditors do not want the added burden of fighting the debts in court, and will very often agree to dismiss them. Many creditors also know right away that they don’t possess the necessary documents to enforce the debt, and will quickly dismiss these cases to “cut their losses”. What creditors want is to be able to quickly and efficiently obtain default judgments and run masses of debtors effortlessly through the process and collect as much as possible without a single conflict.
As mentioned above, many of these debts have a variety of deficiencies. One of these deficiencies is that many unsecured creditors lack a signed writing proving that the debt in fact exists. Without this proof, a debt collection defense attorney can usually get this case dismissed. Similarly, each time a debt is bought and sold, it must have with it proof of the transfer of ownership of the debt. Again, lacking this proof (and this can be quite burdensome to the creditor) the creditor’s claim will often be dismissed. In addition, the Federal Debt Collection Practices Act (“FDCPA”) provides debtors relief from harassing creditors, and nearly all creditors violate this Act at some point in collecting nearly any debt. The FDCPA is very burdensome, and, to be honest, no debt collector could collect a debt in an efficient manner if it complied with every provision of the FDCPA.
Due to the volume, many debts are collected–not in courtrooms as one might think–but in the hallways of many courthouses throughout Indiana. Judges will simply pressure the parties to “go out into the hallway” to work out an agreed payment plan to repay the debt. Many debtors feel slighted by this process and feel that the fairness that is supposed to be administered by the court system is lost in this process. Crown Point Bankruptcy Attorney Christopher C. Hedges writes about a recent action taken by the Indiana Supreme Court to limit this process.
PLEASE NOTE: This is not to be confused with debt consolidation. Debt consolidation is often a scam–bureaus will accept debtors’ money in exchange for purportedly negotiating deals with the client’s creditors, resulting in a lump sum payment. This often looks worse on one’s credit than if the debtor was to remain in default on payments in the first place.
The experienced debt collection attorneys at SFT Lawyers can help. We are well versed in the FDCPA as well as Indiana law regarding the collection of debts. If you have substantial debts and are receiving harassing phone calls and letters from creditors, give us a call so that we can protect your rights. These matters are time sensitive; one day can mean the difference between a default judgment being entered against you or the debt disappearing forever! CALL TODAY!