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What Debt Collectors Can Do

Debt collectors can:

  • Some debt collectors harass and threaten people with dire consequences to get them to pay their debts. But in reality, if a debt collector is trying to collect an unsecured debt (one not collateralised with an asset) he is quite limited in terms of the legal actions he can take to collect from you.

  • If the debt is secured, the process is different. A secured debt is collateralised with an asset that you own, which can be taken away if the debt isn’t kept up to date.

  • Most debt collectors are paid based on the amount of money they collect. They may give up if the collection amount is small. However you don't get off scot free: The fact that the debt was sent to collections and remains unpaid will further damage your credit history and credit score.

  • Debt collectors will go to considerable lengths to collect large debts. If a debt collector sues you, you will be notified of the lawsuit via a summons, which will tell you why you are being sued, for how much and what date you must appear in court.

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  • Should the debt collector win the lawsuit, the judge awards him a certain amount of money. However, the debt collector cannot collect the money from you right away. Instead, he must get the court's permission to take specific actions in order to try to collect from you. For example, the debt collector can ask the court for permission to:

    • Garnish your salary. If the court gives the debt collector permission to garnish your salary, it will issue an order requiring your employer to withhold a certain amount of your salary from each pay check for a certain amount of time.
  • Take one or more of your assets. If a debt collector gets permission to take an asset that you own, the asset is sold in a public auction and the proceeds are applied to your debt.

  • Put a judgment lien on one of your assets. When a lien is placed on one of your assets, you cannot sell or borrow against it without paying the debt collector the money you woe so the lien can be removed.

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