Anyone in the know about the field of debt collection most likely knows about the Fair Debt Collection Practices Act. This legislation was crafted in 1978 and provided a very decent amount of protections for consumers. There are a variety of guidelines that a debt collector must follow, and if any of these rules are violated, you should call up your attorney general’s office and complain. Examples of rules that third party debt collectors must follow include: a debt collector can only call between 8:30 AM – 9 PM, they cannot call a debtor repeatedly, and they must positively identify that they are speaking directly to the debtor before they proceed with their attempt to collect debt.

These are just some of the rules of the FDCPA, which you can look up on Wikipedia if you would like to know more, and also, third party collection agents have to abide by certain state rules and regulations as well. But different kinds of people owe different types of debt. What about that friend of yours who owes you five bucks? Do you have to grant them thirty days to refute the claim? Of course not! You can call up that friend at eleven at night if you know they are up and ask for your money back!

This is where things get tricky. Notice how I specifically said “third party” debt collectors when I spoke about the guidelines of the FDCPA. These are just one type of debt collector. The other kind is called “in house collectors.” Third party debt collectors work for an independent debt collection agency that is hired by a creditor to collect delinquent accounts. In house collectors work directly for the creditor. Usually in house collectors work for financially based institutions that have huge accounts receivable departments like credit and mortgage companies, or health care companies. In house collectors are not considered “debt collectors” under the FDCPA and therefore do not have to follow many of the legal rules.

Three examples: The Department of Education hires seventeen private debt collection companies to collect on federal student loans. Any officer or employee of the Department of Ed is not bound by the FDCPA. But, the private debt collection companies are. Second example: Morency v. Evanston Northwestern Healthcare Corp, a district court case in Illinois from 1999. While trying to collect medical debt, a hospital issued and sent out pre-collection notices. Big no-no for third party collectors. This could have potentially meant that everyone who got that notice would have been absolved of their debt, but the court ruled that the hospital was a creditor, not a collection agency, so the FDCPA did not apply.

Third example: I am infamous for taking out ten books at the library at one time, reading around five, getting distracted and reading other books in between, and reading multiple books at the same time. I am shocked I haven’t gotten my library card revoked. Last summer I had books out for such a long time that they had a debt collector call me! The debt collector called my third party telephone, clearly a shared number, and left intimate information on a message about my delinquent account. I might have been annoyed, but I knew I had to give the books back, and the debt collector told me to pay the library directly, which meant that she was an in house collector, so the FDCPA does not apply. Third party collection agencies will almost always ask you to pay them directly, not the creditor, and they certainly cannot leave messages on third party phones with specific account information. Luckily I returned my books and because it was a public library I ended up owing like five dollars. To find out what makes third party collection agencies and in house collectors different see part two…

Mallory Megan works for Rapid Recovery Solution and writes articles on national collection agencies. Free reprint avaialable from: Why It Pays To Know Who You’re Paying: The Difference Between Third Party And In House Debt Collectors Part One.

All debt collectors must abide by the state laws where they are placing the phone calls that regulate collection efforts, and for a debt collector calling across the country, this all can be very confusing. Oftentimes, collection agents will use software to guide them and help them remember each state’s laws.

But the most important piece of legislation that debt collectors must follow is the Fair Debt Collection Practices Act, a federal law written in 1978 which strictly guides collection activities. Bear in mind that the FDCPA only applies to third party collection agencies, not the original creditors. If a third party collection company buys a debt, then they essentially become the creditors. But, according to law, even if a debt has been purchased, a third party debt collection agency must still abide by the FDCPA.

The Federal Trade Commission watches over the collections industry, and has the capacity to punish collection companies for violating rules of the FDCPA. However due to the fact that they are so busy, the FTC generally doesn’t get involved with general consumer complaints. Only after they receive a substantial amount of complaints against one particular agency will they notice a pattern that could lead to action against it.

If a debt is sold to a third party collection agency, this does not make the debt “new” again. There is a seven year credit reporting time limit that is based on the date of the original delinquency with the original creditor. The time limits for filing lawsuits are also founded on this same date.

After these statutes of limitations run up for filing lawsuits and credit reporting, a third party collection agency can still send out letters and make phone calls about the debts. Someone may question why a debtor might pay back a debt if they are not faced with a negative penalty, and the reason is usually that they are not aware that the debt has an “out of statute” status.

Mallory Megan works for Rapid Recovery Solution and writes articles on commercial collection agencies. This article, How Long Does A Debt Last And What Type Of Rules Regulate Debt Collectors? is available for free reprint.

The extent of a cash payout on a structured settlement depends largely on the dollar value placed on a claimant’s pain and suffering and terms offered by buyout firms. In a structured settlement, claimants can wait months and years to receive rectification for personal injury caused by automobile accidents, or included in trust funds, or annuities.

By conferring with a funding agency that provides a lump sum payment for a structured settlement, individuals and families can become conscious of financial freedom and carry out some lifelong dreams. A lump sum cash payout on structured settlement can displace an annual income for disabled persons, provide money for college, or supply funds to consolidate outstanding debt, such as home and automobile loans or charge card accounts.

In a weak financial market, cashing in today on future income could mean the difference between staying financially strong and bankruptcy. Part of a cash payout on structured settlement can be used to purchase more secure, high-yield investment instruments, such as commodities mutual funds, certificates of deposit, or nearly invincible, government-backed U.S. Treasury bills.

Many funding agencies charge as much as 50 cents on the dollar to convert settlements to cash. To evaluate whether losing up to 50% of future earnings is a wise choice, claimants should confer with a banker, insurance agent, or financial planner.

Claimants should look through on-line funding agencies to obtain multiple free quotes on what it will take to cash in repeated payments before committing to any one agency. Reasonable money management will guarantee that claimants not only receive adequate and equitable compensation, but also that monies will provide a steady, safe income stream for a number of years.

Insurance companies are aware that men and women are living longer, more productive lives. For that reason, a cash payout on structured settlement can be a real gamble. Some suggestions for handling lump sum payments include using funds to remove debt, especially big-ticket items, such as unpaid back taxes, outstanding medical bills, or student loans. Before taking the big jump to sell structured settlements, recipients need to ask: How much money will be accumulated by waiting on periodic payments? How much indebtedness would a lump sum payment eliminate? In the final analysis the decision to negotiate a cash payout on structured settlement plans is a personal one.

Mallory Megan works for Rapid Recovery Solution and writes articles on nationwide collection agencies.