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Debt Collector Questions

Debt collectors are those who take on the burden of collecting debts usually after purchasing them from creditors. Each one may have several debts to collect. The rules each goes by may vary; however, the basic legal framework within which they need to operate remains the same. In order to understand more about debt collectors, their responsibilities and various scenarios concerning them, consult with legal Experts online for assistance.

Read below for questions answered by Experts.

Is a debt collector in violation of any law if they are foreclosing on a property?

To begin with, if the original creditor obtains a judgment lien on the property it is not illegal if they decide to foreclose on a property based on that lien. In case the original creditor has sold the loan to a debt collector or a new servicer has purchased the loan, this transfer provides them the same rights as the original creditor or bank could have enforced.

Is a debtor liable to the creditor if the loan has been transferred to a debt collector?

Case Details: The creditor has had a dispute with the debtor and is trying to garnish the debtor’s savings.

If the debt has been purchased from the original creditor by a debt collector, the original creditor ceases to remain involved in the subsequent dealings and the matter needs to be resolved with the collector directly. In addition to this, if the savings are to be garnished, the debtor does receive intimation about this matter. If the creditor is being persistent, the debtor can send a cease and desist letter to the creditor demanding that they stop further contact. 

Does a debt collector gain any benefit from suing the debtor for non-payment?

Normally, the debt collector does not have any advantage in suing. They are paid on commission and they get paid only if they collect where each payment generates a small commission. Threatening to sue may be a tactic used to scare the debtor into making larger repayments over a longer period of time. 

What are the options for a debtor if they were served papers by a debt collector?

If a debtor was served and he/she fails to answer or file a response to the lawsuit within the stipulated time period, they would be defaulting. 

What does the debt collector imply if they want to go ahead with scheduled payments and a settlement agreement?

The terms ‘agreement on a settlement’ is merely an agreement from the debtor to sign a new contract to make definite or certain payments, specific terms, interest rates, and duration. Based on these terms and the nature of the agreement, the debt collector intends for the debtor to sign an agreement to make payments based on the discussed schedule and honor that agreement. 

In Washington, what is the time limit for collection of debt?

Statutes of limitations are applicable to most debts or contracts dependent on the type of debt. If there was no written contract and the debt was only through an invoice which was neither signed or had any terms and conditions, it is likely to be an oral contract. Under the Washington law, an oral contract has a three-year statute of limitations. If it was a written contract, the statute of limitations is six years.

In Utah, when is the statute of limitations of a debt collector equitably tolled?

Generally, the statute of limitations in Utah is tolled when the defendant does something which prevents the plaintiff from filing a suit. For example: bankruptcy filing or when the defendant is out of the state and not within the jurisdiction of the Utah courts. Though these two situations are the most common type of tolling that debt collectors rely on, there are other types of tolling, such as discovery rule, which states that the limitations period is tolled until the plaintiff is aware of the cause of action. This is unlikely to be utilized since the cause of action is known. 

Above are some of the examples or questions people have had with regard to debt collectors. However, this information provides a general overview, your scenario can be different, which is why directing your personal questions to Experts online can be useful and necessary. You can get answers quickly, economically and confidentially from the comfort of your home.

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