| Question
From Micky
Is
it against the law to leave a message on
a persons answering machine, at the home
phone number that the cust gave you and
you know from previous conversations
they live there, that says they must
contact you because you have assigned
their account to a repo agent? |
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| Answered
By Michelle Dunn |
| Micky,
If you are the
original creditor, it is not illegal for
you to contact a customer regarding a
past due payment. If you have placed the
account with a 3rd party, such as a
collection agency or a repo company,
then you should not contact them and if
they contact you, refer them to that 3rd
party agency you have hired.
Sincerely,
Michelle Dunn
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| Question
From Peter Carvalho
Dear
Michelle: I am part of New Business
Development at A New Horizon in Fort
Lauderdale; a well established Credit
Counseling company with over 14 years
experience as a 501(c) (3) non-profit
organization assisting individuals and
families from all walks of life in
regaining control of their finances. We
do this by utilizing Financial Literacy
training and a host of programs to
counsel and educate individuals on the
responsible use of credit along with a
structured debt management plan to
assist them in paying off their existing
debt. We have been trying to promote to
the Collection Community a softer, more
solution oriented holistic approach to
collections which has the added benefit
of improving the reputation of the
collection industry with the public –
Besides improving their bottom lines.
Through our research we’ve recognized
that the industry trend is moving in
this direction and a company like ours
provides the very solution. This new
initiative is designed for debtors who
are in default and not already in a
Credit Counseling Program. My attempts
to reach out to Collection Agencies have
been unsuccessful so far. Their
corporate culture dictates that it is
better to collect a percentage of what
is due NOW rather than working with the
debtors to establish repayment programs
and ultimately collect near 100% of the
amount owed over the long term. We’re
not asking them to assign ownership of
accounts – They become the creditor
and nothing changes between the
Collection Agency and their client
Agreement. We just get the debt
performing sooner versus later – or
not at all. The concept works for
virtually any industry; Hospitals,
Banks, Credit Unions, and Collection
Agencies. Our programs achieve two
things – Creditors recover the money
they’re owed in an organized manner
and families are educated on managing
their own finances in the future. It’s
a win-win situation for everyone. Your
thoughts on how I can get the Collection
Communities attention? |
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| Answered
By Michelle Dunn |
| Peter,
I have always
suggested to debtors that needed extra
help with their finances
to sign up with a non-profit
organization such as this. For
over
20 years during my collection calls with
debtors I would tell them about local
programs and also met with my local
offices so I could have brochures and
paperwork to send the debtor to make the
transition easier for them. I always
utilized a local non-profit credit
organization and suggest other agency
owners do the same.
If you would like
to join the American Credit &
Collections Association (free) you can
always jump into conversations and
suggest this option to the agency owners
in my group. You can also join the
forums and post about this service and
how it can help the debtor and agency as
well.
I would be happy
to write a blog post about your services
as well with a link to your website.
Otherwise, you may
want to start by looking at industry
trade association for collectors and
suggesting and offering your services,
remember
to let them know how this will help them
collect more money.
In these tough
times this is a viable option for many.
The associations I know of are the ACA
International and my association, The
American Credit & Collections
Association LLC.
Sincerely,
Michelle Dunn |
| |
| Question
From Jeff In Michigan
Can you
explain how the USA went in a few short
decades from a place where a persons
DEBT obligation was a serious contract
to be honored...to where we are today.
The message, sanctioned by our
government is "Reward for
Failure" and "Just Walk
Away". Consume and do not pay,
others will make good on your
obligation. Pursuing a debt today is
considered rude, un-American? |
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| Answered
By Michelle Dunn: |
|
Jeff,
The reason we are
in this situation is because lenders
decided to extend credit to consumers
that were not credit worthy. Causing
credit to no longer be a privilege that
you had to work towards but something
anyone could obtain any time, even with
a bad or non-existent credit history.
In my opinion,
pursuing a debt is not considered rude
or un-American.
It is part of
doing business. Businesses provide a
service or product and deserve to be
paid. Consumers must once again learn
how to live within their means if they
do not want to have debt problems.
Sincerely,
Michelle Dunn |
| |
| Question
From RH In The Midwest:
I run a
small agency in the Midwest.
With the new bankruptcy laws, can one no
longer pursue both joint applicants on a
defaulted loan if one of the applicants
files bankruptcy? I heard that there is
a form that needs to be filed with the
court first? Is this correct? Could you
please clarify? Thank you! |
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| Answered
By Michelle Dunn: |
| To
answer your question on whether you can
continue collections against a co-debtor
when the other co-debtor is in
bankruptcy and/or against guarantors
when businesses are in bankruptcy and/or
against businesses when personal
guarantors are in bankruptcy. Here is an
easy breakdown of how this works:"
Chapter 7 cases -
all
Whether bankrupt
co-debtor is an individual or a company
you can go after co-debtor or guarantor
for payment at any time, whether
bankruptcy is pending or not.
Chapter 13 cases
Bankruptcy by
either debtor stays the action against
the co-debtor for the pendeing of the
bankruptcy case. Once the case has been
dismissed or discharged and all payments
under the bankruptcy have been made we
can proceed against the co-debtor
(non-bankrupt individual) for the
balance due on the account (remember
with dismissal you can return to pursuit
of the co-debtor that filed bankruptcy).
Chapter 11
Although it is
best to wait in a chapter 11 case for
the company to reorganize (allowing for
all focus to be on the reorganization
efforts) you can pursue the individual
as personal guarantor and/or secondarily
liable party during the pending of the
bankruptcy. The company would have to
get an injunction against you to stay
the proceedings against the secondary
party (and since this would most likely
require your having to hire an attorney
in that state, unless there is a
question of statute of limitations
whereby you could proceed immediately).
After the Chapter 11 case has been
terminated you can go after either the
company (if it is still operating) or
the individual.
Regards,
Michelle Dunn
The
Nations authority on collecting money www.MichelleDunn.com
www.Credit-and-Collections.com
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| Question
From Andy Part 2:
Thank for your
answer but I guess I didn't make myself
clear. The
question
is if a collection attorney must dismiss
the case and refile in the county the
debtor moved to when they do want to
pursue the case. Does federal law
require this when a debtor moves to the
next county over? I doubt it since only
one client does it out of many. I
think
he is wasting time and money dismissing
the case and refiling just because the
debtor has move across a county line. |
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| Answered
By Michelle Dunn: |
| Andy,
If you have a
judgment against the debtor you would
need to have that judgment assigned or
transferred to the state the debtor now
resides in, in order to continue to try
and collect or attach assets etc. If
they are in the same state but a
different county, you should not have to
do this but check with an attorney or
your states laws to make sure, many
states have different laws so make sure
to verify by calling your local
courthouse.
Good luck!
Michelle Dunn |
|
| Question
From Garry in Texas:
Can you
supply me with a few vendors that have
prefigured templates that will allow me
to become Red Flag compliant?
I am a small collection agency in TEXAS
being small it has to be reasonably
priced. |
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| Answered
By Michelle Dunn: |
| Garry,
If you do a search
on yahoo or google, there are companies
that do this for you. I checked for you
and found some but they are expensive. I
do have some posts on how to comply with
the red flag rules on my blog, you can
check them out at http://www.credit-and-collections.com/blog/?cat=69
I hope this helps!
Regards,
Michelle Dunn
The Nations
authority on collecting money www.MichelleDunn.com
www.Credit-and-Collections.com |
| |
| Question
From John:
An overseas
collection agency is in need of a
merchant account. Who can you provide me
with? Also need a portfolio of genuine
collection data for payday loans. |
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| Answered
By Michelle Dunn: |
| John,
For a merchant
account for a collection agency try
Modern Payments, or PDC4U, which is an
Internet product that provides the
Gateway for both the front-end
interfaces and delivery for Credit Card
and Automated Clearing House (ACH)
transaction processing. If you contact
them, let them know I sent you.
Good luck.
Regards,
Michelle Dunn
The Nations
authority on collecting money www.MichelleDunn.com
www.Credit-and-Collections.com
|
| |
| Question
From Bill:
Are there any
regulations for commercial collections?
If so where would
I find these? |
| |
| Answered
By Michelle Dunn |
| The
FTC regulates debt collection, and the
FDCPA only relates to 3rd party
collectors collecting on consumer
accounts. For commercial accounts check
the state laws in the state you are in
and the state the debtor you are
collecting is in.
Sincerely,
Michelle Dunn |
| |
| Question
From Andy: |
| I
do a lot of skip tracing for collection
law firms when they try to serve a
lawsuit on a debtor at a bad address.
For one client only if we relocate in a
different county they dismiss the case
and file a new one in the new county.
All of my other clients proceed with
service of the case in the new county
unless located in a different state. Is
my one client that dismisses the cases
correct or are they wasting a lot of
money for filing fees? |
| |
| Answered
By Michelle Dunn |
| It
is really up to the client. It also
depends on how much is owed, how much in
assets the debtor has available, and if
the client feels it is worth it to
continue to pursue.
Sincerely,
Michelle Dunn |
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All
debt collection questions are answered
by Michelle Dunn, an authority on the
Collection Industry |
