Millions of Americans will lose some or all of their stimulus checks to bill collectors.
Are you one of the 33% of Americans who have debt in collections? If so, you’d better watch your bank account carefully. As soon as you receive the stimulus funds, withdraw them.
Unfortunately, some Americans have not been properly notified their old debt is in collections status, and that their bank account could be seized.
Although some lawmakers wanted to make the stimulus garnishment proof against credit card, medical and private student debt, that wasn’t done.
They did make the stimulus payments proof from collection for back taxes and student loan debts.
They can also collect overdue child support payments, but, I’m sure, nobody is objecting to that.
What Upsets Me Most is “Phantom” Debt
That’s when bill collectors not only sell uncollected debt, they resell it multiple times. Even though it’s already been paid. Even though it’s been cleared by bankruptcy.
Some of it is beyond the statute of limitations, meaning it’s too old to legally collect. Or it was dismissed in a court case.
Some of it belonged to someone else with the same name. Or to deceased parents.
Maybe you’re the victim of identity theft.
It can have grown a great deal larger than it originally was. One Verizon customer didn’t pay 11 cents he owed to that company, and in 7 years it grew to $4,000. It’s impossible to find any legitimate investments that yield so much interest.
Sometimes they even just make it up.
When you fall far behind in payments on debt you owe, the creditor will often give up on collecting it themselves. Instead, they’ll sell it to an agency for pennies on the dollar.
The collection agency then has the right to try to collect the debt, but they are supposed to obey the Fair Debt Collections Practices Act. Often they don’t.
Also, sometimes information about the debt is sold and re-sold multiple times. Therefore, it’s possible to have many separate debt collectors harassing you for the same back debt – which you may not even legally still owe.
So, even if you pay off one of the collectors, the others are still demanding payment – for the same original debt.
Do They Have Your Name and Number?
Hopefully, you’re in control of your finances. You spend less than you earn after taxes. You have a mortgage on your home, but you make your monthly payments on time. Maybe you’re paying on your car note. You carry a balance on a few credit cards, but nothing you can’t handle. You’re investing in a 401(k) plan or IRA.
That’s terrific – but have you never known hard financial times?
Many Americans underearn and overspend, and so become vulnerable to “predatory” lenders, such those offering payday loans.
They’re not legal in all states, but they are in mine. Right now, I could walk to one in fifteen minutes and get a loan, even though I live in a fairly affluent area.
Maybe you’re doing well now, but in the past, you took out such a loan.
Maybe you paid it off. Maybe you’ve forgotten about it.
One man took out a payday loan years ago. He paid it off. But he had his personal information sold and resold many times – for a debt he no longer owed.
After a debt collector threatened to rape his wife (NOT a collections tactic authorized by the Fair Debt Collections Practices Act!), the man began investigating the whole industry.
It took a few years, but he traced his problems back to a Kansas City guy who sold the personal information many times.
And who simply made up debts, which he sold to debt collectors.
Having bought the debts, the collectors were very aggressive about collecting them.
They take advantage of how many Americans owe so much, they can’t keep track of what’s still owed and what they’ve paid.
Now, the government wants the Kansas City man to repay $30 million he claims he no longer has. One of his brothers committed suicide and another is in jail.
This crook begged the investigator to lay off him – but the original investigator (who had his wife threatened by one collector, remember) was STILL receiving harassing calls for the debt the Kansas City guy faked years before.
Keep All Records – Paper and Electronic
Keep track of what you owe and what you’ve paid. Try to pay off what you legitimately owe.
If someone calls you about a debt you don’t remember, don’t accept what they say. You have the right to demand they prove you owe them money.
Get their name and all contact information. If they harass you, report them.
Get legal advice.
I used to think “predatory lending” was Visa charging 25% interest to subprime customers.
That’s nothing compared to threatening to rape somebody’s wife for money they don’t even owe.
