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Getting a call from collections is never fun. This is true even in the best case scenario (i.e. when it’s your account and you have the money to pay) because outstanding accounts can be a hassle, and honestly, who likes to see that kind of money draining suddenly from their account? If, on the other hand, the debt is contention, it’s not yours, or just too high to afford, the situation can start to feel a whole lot direr. What you don’t know about debt collections can cost you.

Understand Why A Collections Agency Is Calling You

A collection agency will take control of your account when one, they buy the debt or two, they are hired by the bank/entity who owns the debt to collect on their behalf. During the first 3 to 6 months, banks and credit card companies typically make the collections calls themselves. However, after 180 days of collection activity, the bank “writes off” the debt. It is at this point that most major banks will hire a collection agency to collect the debt. Afterward, banks basically sell the debt at a reduced priced to a collections agency that specializes in this sort of thing. When banks sell the debt, they wipe their hands of the relationship. The business model of a collections agency is to collect more from you than they pay for the debt.

Know Your Rights

While it’s true that debt collectors have the right to collect on a debt if in fact you legitimately owe, that doesn’t mean they can do so when and however they want. There are rules and restrictions which are set forth in the Fair Debt Collection Practices Act (FDCPA). One such guideline is that debt collectors can’t call you early in the morning or late at night. The law states that collections agencies can only call you between the hours of 8 am and 9 pm (local time). If they try and contact you outside of those hours they are in violation of the FDPCA, and you should report them.

Know When Your Old Debts Have Expired

State laws vary on how long creditors are allowed to pursue specific debts. In most states, these limits last less than 6 hours after the time of the last payment made on the account. For more information on your state’s specific creditor-debt-expiration laws, you can take a look at this chart to determine your state’s statutes of limitations.

This chart is especially important to be familiar with whenever you are getting called about an old debt that you suspect may be outside of your state’s statute of limitations. Collection accounts get resold all the time and it’s not uncommon for someone to get a call about a debt that’s outside the SOL or no longer owed. The latter is illegal. The former, however, may not be: The statute of limitations technically applies only to how long a collector is allowed to sue you over a particular debt, but, in some cases, they may still be allowed to try and get you to pay in ways not involving suing you.

You should also note that if an old debt/account is legitimate, you can unintentionally end up restarting the clock on the statute of limitations by paying part of the debt or even by verbally agreeing that the debt is yours to pay. So, it’s important to be sure to get all the details before saying or doing anything that can complicate your financial life.

If you live in South Florida and need an experienced debt lawyer contact the Law Offices of Patrick L. Cordero today at (305) 445-4855 for a free no-obligation consultation.