Credit Card Debt Settlement Versus Bankruptcy (And The Winner Is?)

Many people have a fear of going to court. The judge, the jury, it can be a scary place for someone who doesn’t do it every day. Truth be told, however, is that most credit card cases do not require the individual to actually go to court.

In the case that they claim it’s not an old debt, you are still protected against many debt collection tactics by The Fair Debt Collection Practices Act (FDCPA). This law requires many procedures to be followed by debt collection companies uk, and it seems that the company, which called you, violated this law immediately.

Credit card cases are typically what I call “document” cases. The credit card company, or collection agency, needs documents to prevail in court. Most often, they need a cardmember agreement, terms and conditions, monthly account statements, and if the debt was sold, a copy of the Assignment. (Assignment is a contract between original creditor and purchasing debt collection company). When a debt is sold, at least when it is sold for pennies on the dollar, the documents often are not sold as part of the deal. Most of you are thinking, “That can’t be true, can it”? It is the truth. Think about the price of the debt. A collection agency pays pennies on the dollar, how much can they actually get? Often, its just a name, address, phone number, account number, balance, and not much else.

In California I am not currently aware of people being issued arrest warrants for owing purely personal debt but be aware of situations that could amount to debtor’s prison. Courts always maintain that they put people in jail for violating a court order and not for owing debts and thus they get around the constitutional prohibitions. Some creditors in some states have used this loophole to just get a judge to order payment of the debt and when payment is not made then the judge issues an arrest warrant for failing to follow a judicial order. This amounts to the exact same thing as a debtor’s prison.

The consumer should also request to see the new terms of a contract or agreement by the third party debt collector and the original creditor. It would be very wise to request this information from the time that you receive a letter from the debt collection agency or if the company calls you regarding the bill. Charge offs can seriously harm your credit report.

Consequently, the debt collector has more bargaining power when it comes to dealing with loan defaulters. Often people default on their credit cards because they simply fall upon hard times. In other words it’s not about a lack of desire to pay but instead an inability to pay.

Remember that filing bankruptcy results in an immediate stay being created which blocks any further collection efforts being used against you. This would include any use of debtor’s exams and presumably it would require your release from jail for any failure to pay any debt. It would be hard to file for bankruptcy if you are in jail so it’s better if you beat them to the punch and file before things get this bad.