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Questions about Collection Agency Laws

What is a collection agency?

A collection agency is a type of business that goes after a person for a debt that they owe, regardless if the debt is owed by a person or a business. In most cases, collection agencies operate as a type of agents for the creditors or lenders for a percentage of the debt that is owed. When it comes to collection agencies, there are many types from first-party agencies that are the actual company the debt is owed to or an agent of the company, or a third-party, which is a separate company that is contracted to collect the debt for a fee. When a person purchases the debt, he/she is called a debt buyer.

If a collection agency for a credit card has a judgment against a person, can they take the person’s tax refund?

When a collection agency attempts to collect the debt owed to a credit card and receives a judgment, then the collection agency cannot take the person’s tax return. The only debt that a tax return can be intercepted for is child support obligations or government type debt.

If a person files for bankruptcy, how long does the person have to tolerate collection agencies calling?

When a person files for bankruptcy, the collection agencies are required to stop calling once the notice of bankruptcy filings are received, or when the person tells the collection agency that the bankruptcy has been filed. If the collection agency continues to call the person, then it is considered to be a violation of the bankruptcy code automatic stay, which stops the collection actions against the person that files for bankruptcy. If the collection agency continues to call the person after the notices have been given, then the person can contact a lawyer to file a suit against the collection agency.

In the state of South Carolina, what is the statute of limitations regarding collection agencies calling for a debt?

When it comes to a collection agency collecting on a debt, the statute of limitations in South Carolina is 3 years. This means that if the person did owe the money, then the collection agency could not collect if the debt is over 3 years old.

If a person owes a collection agency a large amount of money, how would they go about seeing if the agency would settle the case?

If the person has the ability to pay the lump sum that is owed, then the person would have a better chance of the collection agency settling the case as compared to making part payments. In most cases, if the person wanted to do a lump sum settlement, then the agency may do this for 50% of the amount of the debt. If the person could only make payments, then he/she would be looking at paying at least 75% of the debt owed. The best way for the person to find out what the collection agency would settle for is to contact them and discuss the settlement option and amount. If there is no agreement on a settlement amount, the person would need to continue to bargain with the collection agency till the amount that is agreed to by both parties.

Collection agencies are in place to collect debts that people owe. When an issue comes up regarding the practices or laws that bind the collection agency, then the person may need to seek Expert insights to clear up any confusion or questions the person may have.
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