The initial debt collection calls you receive will come directly from the bank or credit card company to which you owe the debt. The credit card company will likely charge-off your debts after 180 days if you fail to respond. Many people often mistakenly confuse a “charge-off” as a forgiven debt when in fact the opposite is true. This action reclassifies the account from a performing to a non-performing asset, but credit card companies still have the right to pursue the debt.
Financial institutions have the freedom to either sell your debt or acquire a third party collection agency to collect it. Debt buyers are completely separate from the original creditors and have the option to resell the debt or seek collection themselves. Third-party collection agencies follow the orders of the creditor and receive financial reward for collecting a debt.
The Debt May Not Be Yours
There are instances when collection departments accuse the wrong individual of owing an outstanding sum. Such situations are most likely to occur when creditors sell debt to debt buyers. Debt buyers have package options when they purchase debts from original creditors, some of which do not entail:
- Name of debtor
- Previous payments
- Current debt status
Many collection departments make calls to various individuals with the intentions of getting someone to accept the debt. If you do not believe the debt is yours, you have 30 days after initial collection activity to write a letter to the collection agency in refute of the proposed debt.
There is a Statute of Limitations
There is a 5-year statute of limitations on debt collection in Illinois for an unwritten agreement and 10-year statute of limitations for debt with a written agreement. If an individual files a payment or written promise to pay within the ten year period, legal action is permitted up to ten years after the payment or agreement.
Many collection departments pursue a court judgment after the statute of limitations has expired in the hopes that the individual does not respond to it. No response from the debtor can result in a default judgment in favor of the debt collector.
You Have Legal Options
You should speak with an experienced credit card debt attorney if a creditor is seeking legal action against you. Attorney Heather Benveniste with Benveniste Law Offices can make you aware of your legal options and pursue legal action on your behalf. She has experience representing the afflicted debtor and will not settle until she resolves your debt under the most favorable terms. Contact us today at 1-800-497-5358 for a free consultation.