Ultimate Guide to Handling a Debt Collection Agency

What is a Debt Collection Agency

A debt collection agency is a company that is either hired to collect debt on behalf of someone else or it is a debt buyer who purchases bad debts for collections. They use the mail, telephone, Internet, email, text messaging and other methods of communications and information gathering to collect past due debts originally owed to someone else. Collection attorneys are basically the same thing but they collect debt using additional tools such as lawsuits, wage and bank garnishments, property liens, and other legal methods of securing the debt.   

Is a Debt Buyer the Same as a Debt Collection Agency or Company

Debt buyers are the same as a debt collection agency or company. Under the Utah Collection Agency Act debt buyers must register as debt collectors even when the debt did not originate with them. Debt buyers must register as a collection agency even when they utilize other collection agencies and law firms to collect the debt. They cannot even advertise or solicit the right to collect debt without registering as a debt collection agency.

In Utah, debt buyers are also subject to all of the requirements and prohibitions found in the Fair Debt Collection Practices Act. This is because although they are not technically collecting debts on behalf of another because they are collecting their own debts, their principal purpose is collecting debts. That is sufficient under the FDCPA.  

Debt buyers must register as a collection agency under Utah law even when they utilize other collection agencies or law firms to collect the debt.

Is a Debt Collection Attorney the Same as a Debt Collection Agency

Under the Fair Debt Collection Practices Act debt collection attorneys are typically the same as other debt collection agencies. They are prohibited from using deception, abuse, or other unfair collection tactics. Collection attorneys are also required to follow all of the notice and communication requirements of the FDCPA.

One area where collection attorneys are not the same as debt collection agencies is with the required registration with the State of Utah. Collection attorneys are exempt from having to obtain the state registration as a collection agency but only when the attorney is licensed in Utah. Out-of-state attorneys who are not licensed to practice law in Utah are treated the same as a debt collection company.

How to You Know if the Debt Collection Companies are Real

It is often difficult to know if the debt collection company is real. Debt collection scams are common and the scam callers will often have enough personal information to convince you they are real or legitimate.

Generic business names

The best way to tell if the debt collection company is real is to ask them for their company name. If they give you a generic sounding answer like “collection services” or “litigation support” they are scammers. Real debt collection agencies have real names. This can be tricky however. Some scammers give names that sound more legitimate and then it can be difficult to determine if the debt collection agency is real.  

Lack of a physical address

Another way to tell if the debt collection company is real is to ask them for their physical address. Debt collectors will give you some address. It may be a post office box but it will be a real address to send payments or validation letters. Scam collection agencies either refuse to give you an address, give you a UPS store address, or they hang up when you ask.

Threats of illegal collections

Sometimes you can tell if the debt collection company is real by what threats and statements they make. For example, scam collection companies may make threats to arrest you, have you served with paperwork, or to revoke your driver’s license. Those threats are serious FDCPA violations so if the collection company is real you need to contact a lawyer. Serious damage awards come out of cases like that.

Generic collection demands

Fake debt collection companies will sometimes use generic statements rather than specifics. These vague statements include trying to arrange a time to serve you with papers, references to a commonly used creditor like Capital One or Discover Card, and generic references to a debt without giving specifics about when you opened the account or made the last payment. They will also contact your family, friends, or employer. Again, these can be seriously valuable FDCPA violations so call us if this has happened to you.     

Collection demands for wired or untraceable payments

One of the best ways to determine if the collection agency is real or fake is how they demand payment. Real collection companies will allow you to pay by mail or online and will normally give you a little time to pay. Scam debt collectors will demand payment now over the phone or by wire. You should never pay anyone who calls you out of the blue and you should never wire money to someone you don’t know personally. If they won’t take a check or credit card they are a scam.

How do You Deal With the Debt Collection Companies

Be polite

The best advice I can give you for how to deal with debt collection companies is to be polite. You get nowhere by being rude. Some debt collectors are the scum of the Earth but most will still work with you if you are polite. Seriously, be nice.

Take detailed notes

You should also keep good detailed notes of every call with a debt collector during the call. Record the date, time, names, and other details of the call along with notes about the discussion itself. Record anything that stands out like threats against you or promises to accept lower amounts that the total due. Don’t pay them without a promise in writing but still keep good notes. They could be helpful later on in the collection process. ­Be sure you are taking notes during the call as writing down what happened later is harder to admit as evidence and reduces accuracy as memories fade over time.

Record the collection calls if legal

If legal, record every call with the debt collectors. Be careful though. It must be legal in every state where the participants are located or you could be criminally prosecuted. If the collection agency started the call with a recording or statement telling you they are recording the call you should be okay to also record. Know the law before recording the collection call.

Cease and desist letters

You can also send the debt collection agency a cease and desist letter telling them to stop contacting you. If you prefer mail but don’t want collection calls you can specify that as well. You decide how the debt collector can contact you.

If certain times of the day are inconvenient you can also tell the collection company to stop calling during those times. For example, if you work late at night and sleep until noon tell the collection company not to call before then. Make sure they understand how inconvenient it is to wake you up outside your normal schedule. Then, if they violate those instructions you can sue them.  

If you are not allowed calls at work be sure to tell the collection agency not to call you there. Again, it is illegal under the FDCPA to call you at work when the collector knows you are not allowed to receive those calls. Don’t let the debt collectors get you in trouble at work.

A word of caution is needed here. If you tell the debt collection agencies to stop contacting you many of them will sue to collect the debt. You need to be careful to avoid triggering collection lawsuits while remaining in control of the time and methods of communications available to the debt collectors.   

Debt validation letters

Debt validation letter is often touted as a silver bullet to stop debt collection calls. It isn’t. Requesting validation or verification of the debt can be useful in some cases but debt validation letters do not stop debt collectors. Send one anyway if it comforts you but be careful. Sending the debt validation letter could verify your address and if you promise to repay the debt the letter will restart the statute of limitations. In other words don’t send one if you aren’t sure how to protect your legal rights.

Debt settlement negotiations

If you have the ability to pay and you truly owe the debt, you could try to settle with the collection agency. Start by offering 50% of what you owe and see what it will accept. Don’t promise to pay or make any payments until they agree to the deal in writing. Also, be sure the statute of limitations is not expired or close to expiring when you decide to pay the debt. Once the statute of limitations expires you are no longer legally required to pay the debt.  

Consult with a debt litigation attorney

Another way to deal with collection agencies is to have a lawyer help you. Don’t hire a family law or criminal attorney however. Debt collection issues are unique and if there are violations of the Fair Debt Collection Practices Act you need an experienced collection litigation attorney.    

How Long Can a Debt Collection Company Collect the Debt

Debt collection companies can collect the debt for as long as they want. No, they do not have to stop collecting debt when the statute of limitations expires. The statute of limitations to collect debt only prevents debt collection agencies from suing you. Even then, if you fail to raise the statute of limitations as a defense you waive the defense and the debt collection company can continue collecting. It is a violation of the Fair Debt Collection Practices Act if the collection agency sues you outside the statute of limitations but only if you properly assert the defense and the claim.

The statute of limitations only prevents the debt collection agency from suing you. Regardless of the time that has passed between payments, the debt collection companies can continue attempting to collect.

There are also numerous ways to restart the debt statute of limitations. This happens when you make a payment or promise to pay the debt in writing. Debt collectors cannot unilaterally restart the debt by making a token payment to your account. That sounds ridiculous but some debt collectors have been caught making small payments to restart or reset the statute of limitations to collect debt.

Judgments are collectable for eight years. After the debt collection agency obtains a judgment it can later renew that judgment for an additional eight year period if needed. That keeps your debt active for so long that it might as well be forever. That is why you must answer debt collection lawsuits properly. Allowing a default judgment gives the collection agency so much time to collect it is usually better to attack the problem head-on instead of letting it percolate.

Debt Collection Agency Collection Violations

Under the FDCPA debt collectors have certain requirements and prohibitions. For example, debt collection agencies are required to provide you with information about the debt and its origins. They cannot conceal the identity of the original creditor or the amount you owe.

Debt collection agencies are also prohibited from taking certain actions. Lying to you, disclosing your debt to others, pretending to be someone other than a collection agency, repeatedly calling you at inconvenient places or times, making illegal threats, using racist, obscene, or offensive language, and other similar conduct all violates the Fair Debt Collection Practices Act.       

Can a Debt Collection Agency Report Negative Information in My Credit

In most cases the debt collection agency can report the delinquency on your credit reports. Before they can report they must warn you of the possibility however. Most creditors provide that warning when you sign the agreement creating the debt. That satisfies the requirement though some will still send additional notice of potential credit reporting in their collection letters.

If they report the debt on your credit reports it must be accurate and complete. That means they can’t report incorrect amounts, dates, or other details. Collection agencies are not required to be perfect or to investigate every minute detail prior to reporting the debt in your credit reports. It is up to you to alert them to any inaccuracies.

How to Remove Negative Credit Reporting from a Debt Collection Company

You can remove negative debt collection accounts from your credit reports by sending dispute letters to the credit bureaus. It only works in some cases however. The account must be reporting incorrectly in some way or the dispute will be meaningless.

That is why credit repair companies are mostly scams. Credit repair companies dispute everything negative whether it is accurate or not. That is illegal and dishonest. Disputing accurate information can also trigger debt collection lawsuits but mainstream credit repair companies don’t care if you get sued because of their poorly constructed credit dispute letters. Frankly, most mainstream credit repair companies and credit repair law firms are so ignorant they don’t even know their letters put you at risk of being sued.  

Can You Go to Jail for Not Paying a Debt Collection Agency

Normally you cannot go to jail for failing to pay a debt collection company. Debtor’s prisons are illegal in Utah. Failing to pay the debt can result in aggressive collection efforts however and that can lead to jail time. If you fail to appear for a supplemental proceeding or other mandatory appearance you can be put in jail. That is not the same as going to jail for failing to pay. Instead, you can be incarcerated for failing to appear in court.

You can only be arrested for failing to appear at the supplemental proceeding or other proceeding when you have been served personally with notice. Even when that occurs, many courts will not actually put you in jail. They will instead issue a warrant for your arrest. After the warrant for your arrest is issued the police can arrest you anytime they pull you over or if you have some other contact with a police officer.

With the jails and prisons filling up so quickly it is possible that even with the arrest warrant you may not be arrested. Still, it is better to recognize that although you cannot be put in jail for failing to pay the debt you can be arrested for failing to appear in court.   

Debt Collection Agency Lists

List of Debt Collection Companies Located in Utah

• Gurstel Law Firm
• Johnson Mark LLC
• Knight Adjustment Bureau
• Bonneville Collections
• North American Recovery (NAR)
• Mountain Land Collections
• Outsources Receivables Management
• The Cherrington Firm
• Aldous and Associates
• Constantino Law Office P.C.
• The Law Offices of Kirk A. Cullimore LLC
• American Management Services Inc.
• Perfection Collection
• Premier Recovery Services
• Frontier Recovery Systems

List of Other Debt Collection Companies Operating in Utah

• Frederick J. Hanna and Associates
• National Asset Recovery Inc. (NAR)
• Midland Funding
• Midland Credit Management
• Medicredit Inc.
• Jefferson Capital Systems LLC
• LVNV Funding
• Palisades Collection LLC
• Portfolio Recovery Services
• MRS Associates (MRS BPO Inc.)
• Pinnacle Recovery
• Resurgent Capital
• Encore Capital Group Inc.
• Alliance One
• Alliant Capital Management
• Diaz & Associates
• Pressler & Pressler LLP
• Santander Consumer USA, Inc.
• Zwicker & Associates

These are partial lists of debt collection companies located in Utah or operating in Utah. Other debt collection agencies collecting in Utah might also cause you problems. Call us if you think these or any other debt collection companies or debt collection attorneys are violating the FDCPA.