Collectors are aggressive. There are exceptions. But it is a fact that the culture of the collection industry is rooted in the belief that dominant personalities prevail. The business attracts hard characters. Soft spoken gentle souls tend to make a living in other fields. If you are contacted by a collector forewarned is forearmed. Here are a number of credit repair strategies that can level the playing field, and put you in charge.
Open the Letter Please
If you get a collection letter please do not toss it. There are many reasons to examine it carefully. A significant number of collections are spurious; already paid by you, paid by your insurance company, belonging to another person, and often beyond both the reporting period and statute of limitation. Each of these cases creates a credit repair opportunity.
If the collection is bogus you need to contact the collector immediately. If this is the first letter you have received from the collector they should not have reported the account to the credit bureaus yet. The most effective, formal credit repair technique for stopping them from reporting is to send a debt validation letter. You can include a statement of fact in the letter, but the debt validation format will require them to delay reporting.
Your Statute of Limitation
If you open the letter and recognize the debt as real and accurate you should check the statute of limitation (SOL). In brief, although a collector can sue you after the SOL expires their claim has no teeth. The SOL defense will get the case dismissed and the collector knows it. If you let them know that you know you will be amazed at how willing to negotiate the debt they become.
By the way, the SOL is almost always far shorter than the reporting period limit of seven years, so do not prejudge. Your SOL depends on the type of debt as well as your state. Be aware that there are some cases where the collector can choose which state statute of limitation to apply, the state of residence or the state in which you entered into the contract.
SOL Cheat Sheet:
- Credit card debt: Collectors must use the SOL from the state of residence.
- Written contracts: (Like CAR LOANS and MORTGAGES) Collectors get to pick the State of Contract or Residence.
- Judgments: State debt SOLs no longer apply. There are special SOLs for judgments. Note also that judgments can be renewed so they may live beyond the initial SOL.
And here is a chart of SOLs state-by-state from the nice site NOLO:
Put Us to Work
If you are in our credit repair program we will handle all of the homework for you. All you need to do is send us any collection letters you receive in a timely manner. If a debt validation letter is appropriate we will prepare and send it. If not, we will advise you of your other options. Collections are not a cause for fear. Let us help you find the opportunities they present.