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Legal
Debt Negotiation |
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Call Today: (877) 274-1260 |
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If you
successfully complete our program, it’s possible
that you’ll enjoy these benefits: |
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Settle your debts for less than you owe |
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(read here for full details about how much you can expect to save) |
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Resolve your unsecured debts in 18 to 60 months |
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(read here for full details on how
long our program lasts) |
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No Up Front Fees - Don't Pay Till You See Results! |
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| Understanding the
Debt Negotiation & Collection Process - Part 3 |
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(Disclaimer: The author of this piece is not a lawyer and FDR
makes no guarantees about the accuracy of anything contained herein,
although every effort has been to ensure that the following is not
erroneous. This does not constitute legal advice real or implied.
Moreover, this article deals with the legal process in general
terms, and the information provided here may vary depending on your
state and county. If you want information about your specific
situation, please contact an attorney licensed in your state.)
Throughout the debt negotiation process, you will likely hear
threats from the collectors and creditors that you will be sued.
Many of these threats are idle and meant to prompt full payment of
the outstanding debt. In theory, however, in accordance with the
FDCPA, if a collector threatens legal action, they must have the
intent to do so, but as with much else of the FDCPA, many collectors
violate this provision.
Step 1: Notification by mail – Like collection agencies, law firms
are legally obligated to notify you by mail that they’re handling
your account. As with the initial letter from a collection agency,
you must also be notified of 2 things: 1) your right to dispute the
validity of the debt within 30 days and 2) the letter is a
communication from a debt collector and any information you provide
them will be used for that purpose.
Debt Validation: Attorneys are legally obligated to give you the
right to dispute the validity of the debt under the FDCPA. The
reason for this is ensure that attorneys are not pursuing you for a
debt that you do not owe. During the time the debt is being
validated, all collections activity must cease. What constitutes
legitimate validation of the debt has not yet been determined---some
have argued that it can be as little as a letter saying, “Yes, you
do in fact owe this amount to us.”
In-State vs. Out-of-State Legal Collection: If the law firm that is
collecting your debt is not licensed in the state you live in, they
cannot file a lawsuit against you to collect the outstanding
balance. Most law firms are only licensed in the states they are
located in, or they may mention what additional states they are
licensed in on the letterhead of the notification you receive
initially.
Step 2: Notification of Summons and Complaint – When a law firm does
intend to obtain a judgment against you, you will be notified either
in mail or by service processor (sometimes a sheriff) that you have
been summoned to appear in court. Along with the summons, you will
receive a Complaint, which is simply a legal document with
information about why you are being sued, how much you owe, etc.
Follow this link for a list of some
legal debt settlement and negotiation terms.
Step 3: Filing an Answer – In many counties, you will have 20 days
to file an Answer with the court. You will be notified of the
deadline in the documents served on you in the summons. An Answer is
a formal response stating your defense to the lawsuit. If you do not
file an Answer in time, the creditor is entitled to a default
judgment (a ruling that the creditor is in fact entitled to the full
balance owed). By filing an Answer, you are able to delay the legal
process and buy time in order to accumulate more funds for
settlement or set up a favorable payment arrangement with the
creditor.
Step 4: Executing the Judgment - Assuming the creditor did in fact
win a judgment, the next phase for the creditor is to figure out how
to use it to collect money from the debtor. Depending on what state
you live in, the creditor may garnish your wages, levy your bank
account, or put a lien on your home or vehicle.
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