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There are several legal methods that creditors can use to collect money owed to them. One debt collector tactics
is to turn the delinquent account over to a collection agency. A collection agency is a business that makes money collecting debts. Usually the agents who work for these businesses are on a commission basis and are therefore very motivated to collect the debt. The law does regulate the collection practices of these agencies.
Another legal debt collector tactics is a wage garnishment. Garnishments will never occur without the debtor’s knowledge because a court hearing will be held before a wage garnishment is ordered. A wage garnishment is when a court enters a judgment against the individual who owes the money in favor of the creditor. After the judgment is entered a certain portion of funds are automatically taken out of the debtor’s salary and sent to the creditor. A wage garnishment is different than a wage assignment. A wage assignment is when the debtor’s voluntarily gives consent to have a part of his pay sent directly to the creditor. Be very careful because many creditors will attempt to get the debtor to consent to this method of repayment.
A foreclosure is another debt collector tactic. A foreclosure occurs when the debtor has failed to make mortgage payments. Most banks don’t want to foreclose on your home because it is a long and costly process. Unfortunately, most foreclosed homes are sold at auction for less than what is owned to the bank which makes the homeowner still responsible for the difference between the sale price and the amount of the outstanding loan.
The best way to avoid debt collector tactics is to make your loan payments or pay for your debt as agreed. Most creditors appreciate knowing there is a problem beforehand and will try to work out an agreement
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