13 Collections Myths BUSTED

13 COLLECTION MYTHS BUSTED

Many people believe the common myths of collections. Most of them are myths that are as effective as an ostrich sticking its head in the sand.  Don’t be an ostrich.

  • 1.     If I make a payment they will leave me alone.

FALSE.  Usually, if you make a payment, it means that they know that you have some money, and will pay more.  They will bother you more, not less.

  • 2.     If I make any payment at all, they cannot sue me.

FALSE.  In fact, making a payment may restart an expired statute of limitations. You may make it so that if they could not sue before, they can sue now.

  • 3.     If I settle, it will improve my credit rating.

FALSE. If you make a payment, it may decrease your score, because there is now recent activity on a negative account.  Eventually, the score may go back up, but for the short term, the score will be lower.

  • 4.     All debt collectors sue.

FALSE.  Most debt collectors do not sue. Check to see if the debt collectors are located in your state of residence (we are talking about Virginia here), and if they are licensed as a lawyer there. If they are not licensed in your state, then they cannot sue, they cannot get a judgment, and they cannot attach your wages or bank account.

  • 5.     If I get sued, I can lose my house or my car.

USUALY FALSE. There are circumstances where people can lose their house or car, but those are relatively rare. Cars have an automatic exemption in Virginia for $6,000.  Houses do not have an automatic exemption, but most homes do not have enough equity in them to be at risk.

  • 6.     If I get sued, my spouse’s wages can be garnished.

FALSE.  Only you are responsible for the debts that you owe.  Virginia is not a community property state, so spouses are only responsible for the debts that they sign for, or are for medically necessary expenses.

  • 7.     If I get sued, my spouse will be liable for my debts.

FALSE.  Only you are responsible for the debts that you owe.  Virginia is not a community property state, so spouses are only responsible for the debts that they sign for, or are for medically necessary expenses.

  • 8.     If I get sued and don’t go to court, they can’t get a judgment.

FALSE. You only are entitled to get notice and have a fair hearing.  If you do not show up, then it is your problem.

  • 9.     If I move and don’t tell them, they can’t sue me.

FALSE.  A creditor can sue and get a judgment based on service at an address you used to live at, if you do not keep them in the loop about where you live.

  • 10.If they get a judgment, my entire wages can be attached.

FALSE.  Under Federal law, your wages can only have 25% taken, except for certain debts, like taxes and child support.

  • 11.If they get a judgment, they can take my social security money.

FALSE. Social Security Disability and Supplemental Security Income cannot be taken, even if it is in your Bank account. In fact, the Federal Regulations have been recently changed, and the bank must protect, automatically, 2 months of SSD or SSI benefits.

  • 12.If I don’t pay, they can put me in jail.

FALSE. Almost all debts, including credit cards and payday loans, are civil matters, for which the failure to pay is not criminal. It is not fraud to fail to pay almost any debt.  Of course, there are exceptions, for example, child support and taxes can put you in jail, and a payday loan taken on an account that was closed when you took out the loan.

  • 13.If my car is repossessed, I don’t owe any more money.

FALSE.  Under the laws of most states, you owe the difference between the balance of what was owed and the amount they got when they sold the car.  Of course, there are some exceptions, and time limits.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES. 

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

OUR FEES: Our fees are controlled by the local rules and your situation.  They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230