Debt collection is very important, and many businesses would not have been able to survive if they didn’t have third party collection agency handle their overdue accounts. However, the debt collection industry itself does get a bad reputation, mostly because of a few bad actors and a huge number of myths that have been built around the industry. To help clear the air on some of these unfair half-truths, here is a list of some of the most odious debt collection agency myths.
The Debt Goes Away if You Ignore It
This is one of the most harmful myths about debt collection. Many people believe that if they manage to hide away from debt collectors and ignore the debt, they will eventually be able to move on like it didn’t exist.
The truth is that even though the collection calls and letters may stop if you manage to hide long enough, the debt will never go away. It will continue to appear on your credit report and will affect your financial health somewhere down the line. You might not be able to borrow from banks, or get approved for cards or mortgages, because companies will see your record of running away from debts.
And that doesn’t even factor in large debt collection firms that have the tools and resources to track you down and take you to court, if the debt is big enough to make it worth their time.
A Cease and Desist Letter Will Stop a Debt Collection Agency
Some debtors try to stop debt collectors by sending them a cease and desist letter. This is a waste of your time, because debt collection agencies are operating within the law and have no reason to fear a cease and desist. Of course, some of the particularly abusive debt collectors stop because they know they are doing something wrong. But the debt collectors who know what they are doing can’t be stopped by a C and D. The best you could hope for is get them to reassign your debt to another collector, and your current cease and desist letter does not apply to a different collector.
Making a Payment Restarts the Credit Reporting Time Limit
Some people believe that they should wait until they can pay off a debt in full before they do pay, because they are under the impression that making a payment will reset the credit reporting time limit and thus make the debt appear longer on their credit report. The truth is that it doesn’t matter whether you make a payment or not – the collection will get stricken from your credit report after 7 years. So if you do have enough money to make a payment, do so and get rid of your debts faster.
You Can’t Get Sued for Debts That Are Past the Statute of Limitations
This is a very dangerous myth, because it gives people the impression that they can get away without any legal trouble as long as they can hide or run away long enough. It is true that the statute of limitations put a time limit on when a debt is legally enforceable, but there are debt collectors who will still sue you and it will be up to you to fight it in court just to prove that the statute of limitations have passed. Whether you win or lose in this court battle doesn’t matter, it will usually be costly and time consuming that it would be significantly easier to just pay off the debt in the first place.
Many of the problems with debt collection stem from the fact that there are numerous falsehoods being passed off as facts.
Author Bio:- Joan Geller is an expert when it comes to business debt collection with more than 10 years’ worth of experience in the industry. She is currently working as a consultant for financial institutions, lending her expertise towards more efficient collections. Visit www.commercialcollectionsfirm.com for more information about debt collection agencies.