Saturday, June 14, 2014

When the debt collector calls

At the time of writing this I am receiving a number of emails from people concerned after receiving calls from debt collectors who seem to have a vast amount of knowledge re a particular situation. Be very careful about verifying who you are. More often than not these callers do not know who you are and if you actually belong to a particular debt and they really do not seem to care. They use fear of the unknown to get people to act on the spur of the moment. These callers are very good at either making you believe they have all your personal details or in some cases they have really done their homework. It is amazing how much information some people still reveal on social media sites.

Current Debt

If you are struggling with debt and are falling behind in payments NOW is the time to act. Hiding will not make them go away and can in fact make things much worse. Here are my tips for dealing with the creditors and debt collectors when they call.

Stay calm and remain polite even though they may not be

Do not make any rash promises and if you need time to think just say so-tell them to call back later

Ask for a copy of the current statement to be emailed to you- be wary of giving out current address,employer details ect.

I never negotiate verbally with debt collector- if they become abusive or make threats simply state you are not prepared to be treated like that and are going to lodge a complaint with ASIC. 
One of my greatest mistakes was beleiving debt collectors wanted to assist- they are only interested in one thing a that is certainly not your well being.

Once you have been contacted by a debt collector it is time to act- delay no longer as you do not want a judgement or default against your name.

Ask if the debt has been sold or whether you are still dealing with the original creditor

Contact the credit provider immediately and try to sort out an arrangement

Contact a debt negotiation firm and ask for assistance. There are some really caring and professional groups out there who will assess your situation and offer alternatives- remember you are in charge and never accept something you are uncomfortable with. I have included a link below for a firm that if nothing else gave me some reassurance that ll was not lost.

Above all else stay positive- becoming upset and stressed will not help. You are not alone and there is plenty of good help available. I able able to give general assistance and guide you in the general direction of a professional who can assist with your specific circumstances. 

Fox Symes helps thousands of Australians every year- click the banner and fill out the quick online form. A caring professional debt advisor will call you back to discuss your options and advise on the best course of action. 

Fox Symes & Associates - Debt Consolidation Solutions

Friday, June 6, 2014

Second hand debt

Never heard of it?? then read on

Secondhand Debt

 Something most people do not realise is that most debt which is being chased by the large debt collectors no longer belongs to the original creditor. The collection agency has actually purchased what is know as non performing debt for a small percentage of its actual cost. They then attempt to add costs and collect on the full amount. This is generally credit cards, phone accounts and unsecured personal loans. An example might be- John owes $5000 on a credit card he cannot afford due to loss of his job. The issuer has attempted to collect from John but has realised he cannot afford to pay. 
The cost of legal action and debt collectors will simply add more o an account they know John cannot pay so they write the debt off. Enter the lucrative world of the secondhand debt industry. These debts are usually put up for "auction" and sold to the highest bidder. The $5000 debt is probably purchased for under $1000. Enter the credit agreement John signed which stated something like in event of this account being in default of our terms we reserve the right to collect using any means available (within the law of course) and also recover all associated costs-  or something to that effect. See you thought all that legal mumbo jumbo was just there to fill in the pages. Any protection under the privacy act would also be lost when you signed that dreaded privacy form.
I hear you all screaming how can this be legal- I entered a contract with the credit providor why the hell should my debt now be with somebody i have never heard of. Much to my disgust it is according to a prehistoric property law click here if you feel the need to read it but it makes bugger all sense to me.
The bottom line is that it is legal and is a huge business which seems to be increasing all the time. The assignment of the debt to the new "owner" includes all contracts and the right to charge pretty well whatever they like in charges. The $5000 debt has now become $15000. This particular law needs to be tested in court to see if it holds up-  BUT who when in financial distress is gonna be able to fin the huge fees to test it.

Now a little bit of legal stuff just to confuse things a bit more.

According to the law there is no time period the creditors need to wait before selling the debt- as soon as you are conducting the account outside the agreed terms they are free to sell it.
For the assignment or transfer of the debt to comply with the law in all States and Territories in Australia it must satisfy 4 elements.
1. The assignment must be absolute ie. the entire debt including all rights and contracts must be transfered and replaced under the receiving parties control.
2. The assignment must be in writing and signed by the assignor- there is no requirement for the debtor to be shown this document-which is like a bill of sale I guess- only a notice of assignment as descibed in 4 below
3.  The intention of the parties to the assignment within the written document that it is an absolute assignment between the parties
4. Written notice to be given to the debtor- there is no time requirement for this notice as long as it is served BEFORE any attempts are made to enforce the debt.

I have not after speaking to hundreds of debtors since setting up this site come across one single person including myself who has been notified of the assignment of a debt verbally let alone in writing. 

It may be prudent at this stage to highlight the fact that debt becomes statute barred after 6 years in most Australian States and Territories ie. A debt can no longer be enforced or default listed after 6 years from the last time you made a payment or verified in writing that the debt was yours.

So when the debt collector calls about a debt you have forgotten about for whatever reason- or maybe you thought it had been sorted by an ex partner or whatever. Make sure you ask if the debt is still with the original creditor or if it has been sold. Request the relevant paperwork  to verify the assignment and insist on getting a copy of the original contract showing the debt is actually yours and also a current complete statement showing the balance and any additional charges. You are now in control. If the collection agency fails to comply simply CONTACT ME and I will point you in the direction of the correct action to take.

This is my view of the current very confusing law in relation to debt assignment in our fair country. If you have an opinion or something to add please let me know