The practice of buying “junk debts”—debts that are significantly delinquent and have been given up on by the original creditors—and then attempting to collect on them has grown into a thriving industry worth billions of dollars. Unfortunately, it’s the companies that buy junk debts that typically engage in harassment and other abusive practices, preying on vulnerable people who are often already overwhelmed by debt and don’t understand their rights.
What is a junk debt and why would anyone want to buy one?
A junk debt is any debt such as a credit card balance, car loan, phone debt, or retail account that has been charged off (meaning that the creditor has essentially written it off and no longer expects that it will be paid). Junk debt buyers purchase these from the original creditors at a fraction of the price, and the creditors are happy to sell to a third party, often packaging thousands of written off accounts together, because they would rather recoup a portion of the debt than nothing at all. Meanwhile, the junk debt buyers are then free to seek the full amount (and often more) from the debtor using any means necessary.
How can I avoid being taken advantage of by a junk debt buyer?
A third party debt collector might use any of the following tactics to collect on a debt of yours that they’ve acquired:
- Repeatedly calling you, even at unreasonable hours of the day
- Making threatening or false claims about your debt and what could happen if you fail to pay
- Intentionally avoiding identifying themselves as debt collectors
- Piling additional fees onto your debt in the form of interest or other charges
- Threatening lawsuit or other legal penalties
Many of these tactics are considered harassment or are otherwise illegal according to the Federal Fair Debt Collection Practices Act of 1977 (FDCPA). Another way they may prey on you is by convincing you to pay a portion of what you owe at a given time—“whatever you can pay now”—thereby reviving the statute of limitations on your debt and allowing them to sue you for the full balance or more later.
In truth, junk debt buyers know very little about you or the debt you owe, but they are highly trained to fish for information they could use against you while convincing you that they already know everything. Instead of engaging or negotiating with a third party debt collector, take the following steps to protect yourself:
- Withhold all personal information from the collector
- Do not acknowledge whether a debt is indeed yours or confirm its amount
- Never pay off a debt or a portion of a debt over the phone
- Retain all records and correspondence pertaining to your debt, both from the original creditor and from a third party collector. Keep a log of all calls you receive.
- Secure representation from a trustworthy bankruptcy attorney
A lawyer can help you understand your rights and support you if you’ve been sued by a junk debt buyer.
Contact a Bronx financial law attorney for help dealing with junk debt collector
With more than 30 years of experience counseling New Yorkers on financial legal matters, attorney Thomas M. Denaro, Esq. is a reliable and knowledgeable advocate who’s here for you. To learn more about how he can help, call (718) 863-6000 or contact the law firm online and schedule a free consultation today.