By: Shannon (Guest writer)

Let’s begin with Guarded Secrets #3 that Debt Collectors try and hide from consumers. The biggest secret that Debt Collectors and Debt Collection Agencies don’t want consumers to find out is many debt collection agencies cannot try and collect any money from you.

Note: Part 1 of this two-part article is published here.

Many of them are doing business illegally. You see ALL debt collectors must be licensed and bonded. You can go to your State Assessments website to check the debt collection agencies license. Remember, having a business license is the first step. They must also be bonded. In lieu of checking via the internet, you can call your state attorney general’s office to check and see if they are licensed.

If you find that the debt collection agency is not licensed simply write them a letter explaining that according to your Attorney General’s office, that company is not listed and you do not support or encourage unlicensed businesses in your state.

Therefore, you are unable to provide any further information until that Debt Collection Agency can show that they are licensed and bonded in your state. Funny right!  Yes, I have sent many letters like this and never heard from the Debt Collection Agency again.

An unlicensed company that is doing business in your state can be sued, and you can inform them of this just to let them know you are educated in your consumer laws.

Guarded Secret #4: Many consumers don’t know anything about Statute of Limitations. This is the time period that any legal action can be initiated. Once the Statute of Limitations runs out your obligation to repay expires.

For example, you get a credit card and don’t pay the balance off and 10 years go by and suddenly you hear from a debt collection agency telling you they are collecting on this past credit card debt. They cannot legally collect because the statute of limitations has passed. Simply explain that the statute of limitations has passed and hang up the phone. No other explanation is necessary because the Debt Collector will know exactly what you’re referring to.

Each state has their Statute of Limitations, so you should check into your specific state information.

These are simple legal strategies that every consumer is afforded. No one is willing to tell us that most of our debt we do not have to pay back. We must educate ourselves and learn how to stay ahead of the curve. If you don’t you could be paying a lot more than you have to.

Don’t forget to check out part 1 of this article if you missed it.

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Most people know very little about debt collectors and debt collection practices and what is legal and what is not. When you become caught up in a downfall of unpaid bills, harassing phone calls from debt collectors and not knowing what to expect from debt collectors you fall into a category with millions of other consumers.

There is no gimmick; no tricks and no mystery to what debt collectors can do and what they can’t do. While the law is on your side, you really must decipher exactly what the law can do for you and how to enforce your rights. So here are some consumer rules for you to follow when debt collectors began harassing you. These are laymen’s terms for consumers.

• Debt Collectors and Debt Collection Agencies that have been hired on commission to collect on bad debt are considered third party. You do not have to deal with a third party collector. Just tell the debt collector that you do not deal with third party collections and you only deal directly with the original creditor…then hang up. Its that simple.
• Debt Collectors and Debt Collection Agencies can own the debt if the original creditor sells them the debt. Many creditors understand the time and expense it will take to collect on bad debt, so they simply sell it to a debt collection agency. The debt collector begins harassing you to recoup that money. But now, they are the creditor. Even with this in mind, you can dispute the account and tell them to send proof.

**Here is guarded secret #1. When creditors sell an account, it’s usually an old account and they usually (about 90 percent of the time) do not transfer all pertinent paperwork with your file to the new creditor. Or, the new creditor, in haste, misplaces the original documents, thus, now they are unable to prove that you owe the money. In order to prove the account is yours, detailed information is really needed because if you go into court they must prove that this account is 100% yours. This is why you ALWAYS deny, deny, deny and dispute any recollection of that account.

• Debt Collectors will call you and go through the charade of starting legal proceedings if you do not pay that day or that week. They will try and force you to send money via Western Union and they are always willing to negotiate to a lesser amount or a repayment plan over a few weeks. Do not fall for this tactic. Never pay and Never promise to pay any amounts. You always say you do not recollect any account and you need proof.

**Here is guarded secret #2. If you pay on any account, even the smallest minimum, this can re-start your obligation to pay that account all over again. See, the courts see it like this; if the account wasn’t yours you would never send money to pay on it, therefore, you are acknowledging the account by paying money towards the balance. This is why you NEVER, NEVER pay.

These are a few tactics Debt Collectors and Debt Collection Agencies will use to get you to obligate yourself in paying a debt. Once you obligate yourself, it can then be listed on your credit report. When dealing with Debt Collectors and Debt Collection Agencies, never provide any information and never promise to make any payments.