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People go into debt for many reasons: to buy a house or car, to go to college or pay medical expenses. Sometimes, though, if there is a job loss or other financial crisis, it is hard to pay off the debt. When fighting off debt collectors, it helps to understand how the debt collection process works. If the debt is credit card debt, the bank that issued the card will usually start calling or issuing letters. When the account becomes 30, 60, 90 and 120 days delinquent, they report it to a credit agency that maintains credit ratings. Also, they may hire third party debt collectorsto try and collect the debt. If all else fails, after about six months or so the bank that issued the credit card will charge off the debt. They take it as a business loss and use it as a tax write off. The next phase may involve a debt buyer who buys the debt along with other debts in a debt portfolio from the original creditor who charged off the account. The debt buyer buys a portfolio of debts for pennies on the dollar with the cost depending on how much time is left on the statute of limitations. Some debt buyers then force the debtor into litigation in order to obtain a judgment on the debt. |