Collection agencies ruin your day every time they contact you. Within minutes, they can sink your credit score by reporting to the credit bureaus that you have an open collections account, then hold it over your head until you pay up.
Thankfully, the best credit repair companies in New York can help fix your credit score. Unfortunately, a collection agency can indeed sue you–but first, let’s dive into how collection agencies work.
How Far Can a Collector Go?
When a collections agency contacts you, it’s important to understand that the debt collectors have purchased your debt for pennies on the dollar. This means that if they collect the debt, they will reap a massive profit. This is highly motivating for the collectors.
Before congress passed the FDCPA (Fair Debt Collection Practices Act) in the 1970s, the world of debt collection was almost completely unregulated. People were repeatedly harassed, threatened with harm, and had their names dragged through the mud in an attempt to collect debts.
Thankfully, once the government got its act together, the FDCPA provided citizens with some protection. Even with these protections in place, however, there are multiple tools at hand for a debt collection agency, as long as they haven’t passed the statute of limitations on debt in New York.
Tanking Your Credit Score
If the debt collector hasn’t managed to reach them, many Americans find out they have a collections account when they are turned down for a loan or a credit card. A single collections account can drop your score by up to one hundred points–or more.
Contacting You Repeatedly
While the FDCPA says collection agencies can’t harass you, this doesn’t mean they have to stop calling you. In fact, the only way to get a debt collector to stop calling is to send a written letter via certified mail. If this is done, the collector may opt to escalate the issue through other means.
Filing Lawsuits
A debt collector may sue you for your debt. Unlike annoying phone calls, though, this is a situation you cannot ignore. If you fail to show up in court, the collection agency will win by default. That is when some concerning options become available to the agency.
Wage Garnishment
With a court order in hand, the collection agency may appeal to the state to have your wages garnished until the debt is paid. This can take a serious bite out of someone’s paycheck and cause them to fall behind on other debts, leading to a downward spiral of financial despair.
Credit Repair Can Help
Your case doesn’t have to go to court before you call an attorney. A debt collection lawyer working for a credit repair company such as The Phenix Group can help.
Credit repair companies know every possible scare tactic, coercion method, and intimidation strategy that debt collectors utilize. They also know the law and how to make it work for you.
Credit repair companies will work with debt collectors, banks, and credit reporting bureaus to help get fraudulent, incorrect, or inaccurate collection accounts removed from your credit report. Once these accounts have been removed from your credit report, your score will rebound accordingly, making you eligible for all sorts of loans and credit options that were previously out of reach.
Final Thoughts
Debt collectors aren’t to be taken lightly, especially if they plan to sue you. Dealing with debt collectors is the first step to improving your credit score and gaining access to vastly lower interest rates.
When you consider that lowering a $300,000 mortgage from 5% to 4% interest means saving $60,000 over the life of the loan, you can’t afford not to let a credit repair company have a look at your file. Give The Phenix Group a call today, and see how we can help boost your credit health!