The Credit Card Debt Collection Process

For those Americans who have credit card debt they can no longer pay, they can expect to have some type of collection procedures instituted by the credit card companies. Credit card companies make money by collecting money owed them. They will institute every legal debt collection procedure available. Their efforts will range from civil and polite to harsh and intimidating.

 

Credit card companies usually keep the delinquent accounts “in-house” for about 3 to 6 months. During this time they will try to collect the accounts using credit card company employees. Collection attempts will include letters and telephone calls to the credit card holder.

At this time the credit card companies will make some kind of offer. Any offer they make will be for the benefit of the credit card companies and not the credit card holder. Their objective is to get the credit card holder back on the “credit card treadmill” of once again making monthly payments on the accounts. During this time the credit card companies get increasingly aggressive and start making veiled threats such as “your account is going to charge off” or “your account may go to legal”.

After an accounts have been delinquent for about 90 to 120 days credit card companies will “charge off” the accounts. A “charge off” is simply an accounting entry on the books of the credit card companies. It permits the credit card companies to write accounts off as an “asset” and charge them as a “loss”. For them this occurrence has accounting and tax ramifications.

After accounts have been “charged off” credit card companies may sell the accounts to second parties. This sale is usually for pennies on the dollar. Second party holders will become very aggressive in trying the collect the account. They want to get payment for sums over and above the amount they paid to buy the accounts. The difference between the purchase price and the collection amount is their profit. These new owners will either collect the accounts themselves
or turn them over to 3rd party bill collectors.

Eventually, the credit card companies or the new owners of the accounts, if the accounts have been sold, will turn the accounts over to 3rd party bill collectors. At this point collection procedures usually become quite brutal. The intensity and rapidity of telephone calls is accelerated. The bill collectors can be threatening, abusive, and intimidating. Some have gone so far as to tell debtors that by not paying the debt they have committed a crime and will be arrested and sent to jail. They will call repeatedly at all hours of the day.

Fortunately, the US Congress has enacted the Fair Debt Collection Practices Act (FDCPA) which now gives consumers protection from illegal collection activities by bill collectors. The Illegal activities are listed in the Act. If subjected to any of these illegal activities, consumers can get redress by filing a civil suit against the bill collector and collecting a judgment for damages. This judgment for damages will include an order by the Court requiring the bill collector to pay the
attorney fees of the debtor. Moreover, consumers can file a complaint with the Federal Trade Commission (FTC) who will investigate the complaint, and if found to have merit, will impose sanctions against the bill collector.

After the credit card companies or second party owners have failed to collect, the accounts may go to debt collection attorneys. These attorneys will make an attempt to collect the accounts through letters and telephone calls to the consumer. If this fails they will file a debt collection lawsuit against the debtor. After judgment has been obtained, the attorneys will institute judgment debt collection procedures. These procedures can be quite harsh.

Associated Attorneys, LLC. will provide you with an attorney at law, licensed and practicing law in your state, who is well qualified in giving you help with credit card debt by negotiating your credit card debt and giving you credit card debt elimination. Credit card debt management by your attorney is the best, safest, most effective debt settlement available. Moreover, it will be provided at a very reasonable cost.

For a free confidential consolation call (866) 411-4693 or contact at www.associatedattorneys.com

About the Author: Melvin R. Singleterry, licensed and practicing attorney, former Judge and former elected District Attorney specializing in credit card debt relief and debt settlement.

Owner of Associated Attorneys, LLC.