Updated: June 30, 2016
Being deep in loans and credit card debt is hard enough – but add to that the negativity and harassment of debt collectors, and you’ve got yourself a major headache.
Fortunately, we have today guest blogger, Christopher, who shares below three common lies that debt collectors tell.
His examples may show cases for the US, but knowing how it is in the country – I can say that they also apply to the Philippines.
Additionally, he does say a lot of very good lessons that anyone, wherever they are, must learn.
Let’s now read what those three debt collector lies are.
If you’ve ever been in the situation where you had to deal with a debt collector then you’re already aware than they can, at times, be very shady individuals.
They’re doing their job and their job is to get money from you. People have often needed to get cash advances, and other drastic measures, to pay off debt but you don’t always have to feel like the sky is falling.
Realize that you do have options and you shouldn’t trust someone’s word. Educate yourself first.
At times, a debt collector’s tactics can be rude or even obnoxious but sometimes they’re flat-out lying or misrepresenting the facts in order to scare you into paying them.
If you haven’t had to deal with a bill collector, it’s good to be aware of some of the common lies that debt collectors will employ.
Lie 1: Pay Your Debt To Improve Your Credit Rating
It’s always good to pay off your debt but not everyone is in the position to be able to throw a lot of money at their debt all at once.
It’s true that if you’ve been chronically late on payments that it could adversely affect your credit rating but, paying it off immediately isn’t going to change anything.
The damage has been done so don’t kill yourself paying every cent back as soon as possible for the purposes of getting a better score.
In some cases, if you’ve gotten formal writing from a creditor, you can have the bad credit affect expunged but this is only in certain cases. First talk to your creditor about this and make sure to get it into writing.
Lie 2: Post-Dated Checks Will Solve The Problem
Any verbal agreement you make with a debt collector over the phone won’t hold up in court. Debt collectors often tell people that if they send a post-dated check that the problem will be solved. This is rarely the case.
You don’t know what’s going to happen with that check. You’re sending them your bank number and account information and collectors have been known to cash post-dated checks earlier than you previously agreed upon.
If you don’t have the adequate funds in your account you could get hit with hefty fines from your bank. Instead, use money orders and the like to make payments.
Lie 3: Only Immediate Payment Will Keep You Out of Court
It’s a common misconception that, unless you pay immediately, a collector will garnish your wages or take you to court.
Under the Fair Debt Collection Practices Act, collectors can’t legally threaten to take you to court if they have no intention of doing so nor can they casually garnish your wages. There is a structured legal process behind both of these approaches and you’ll be given notice if this happens.
It’s important for anyone to approach borrowing and debt payment responsibly. If you’ve found yourself in debt, you should work with a professional and find the best way to get your finances in order.
It’s also important to understand that you do have rights and you shouldn’t let debt collectors scare you. If you don’t have the immediate cash on hand, don’t get rattled by threats.
In many cases this is nothing more than posturing and empty threats. Instead, take a breath and deal with the situation rationally and work towards paying off your debts in a timely, yet responsible, fashion.
This guest post is contributed by Christopher Lillian, a debt consolidation specialist from California.
Thanks to Christian for this guest post.
Hi. My mother recently received a call from our barangay that I have a stafa case in Regional Trial court in QC. They say that I have a subpoena and a warrant that will be given to me tomorrow. That gave me a headache today. Will it be possible that if i dont pay my credit card debt I will summoned to court and will be charged of estafa?
Hope to hear your response. I dont know whom to ask this question for I cant afford to consult a lawyer also.
Hi,
I read your articles on “credit card debts”..Can you enlighten me on what would happen if you do not pay your bank loans in the Phils?..like those we can get get for 12 months to pay, or 24 months to pay…These are the non-secured personal loans, wherein you are not required to submit PDC’s….Will you go to jail for not paying it fully?…
Thanks & look forward to your reply.
hi i need to know if the collectors can take me to court and what is the worst thing that can happend to me if i dont pay for a credit card? please answer me asap thank you so much i need help.
The debt collection agency or a law office told my aunt that they are going to take her furnitures if I don’t pay my credit card debts. They went to her place and looking for me. I was no longer lived there and also I don’t have work for past 8 months. Can they actually take the things/properties which ate not mine? Thanks and hoping for your response.
Good day,i have big credits on my 4 credit cards.i stop my payment since jan 2014,for my 3 cards and the other one just recently due to financial problem. The collection agency always make a calls also thru texting but i don’t answer them all,coz i don’t want to commit them coz i don’t have money to pay this time.is it possible if i have some amount to go directly to the bank to pay whatever amount i will pay to them anytime and if they will issue me a clearance…
I understand that this response may be too late already but I would like to reply nonetheless ^_^
@Maui: By definition, it’s an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent, and verb is defraud. Did you do any of these? Example, did you purposely issue checks even though you are FULLY aware that it’ll be a bouncing cheque? If yes, then that may be a ground for estafa. You tried to give an impression that you are going to pay but you didn’t really have an intention to do so. Or if it’s a credit card debt, you borrowed money then went on AWOL almost immediately after receiving it. If talagang inevitable reason why di ka makabayad, I know folks na ngpromissory or ng-enter ng any form of agreement. Depende sa institution.
@Hermione and Letty: As per Philippine constitution, “No person shall be imprisoned for debt or non-payment of a poll tax.” But recently, many arguments arise from that. Kahit ako naguguluhan. Try checking Article III of the Philippine Bill of Rights. As for the worst sanction na naencounter ko, a person I knew inherited a deceased person’s credit card debt kasi co-signor siya. Nung hindi siya nakabayad, ngfile ng case yung bank na nagstipulate na any asset na pwede i-liquidate, is kukunin ng bank. Kaya kahit bank accounts niya nasara lahat. Kasi tuwing may pumapasok na pera, naaalert yung bank and kinukuha nila yung pera. Tapos any business or asset na nakaunder sa name niya, pwede habulin or kunin para mareplenish yung utang. If I remember it correctly, in effect yun for the next 10 years.
@Ynah: Wala sila right kunin yung property ng Aunt mo. HIndi mo pagmamay-ari yung house and anything in it. So kahit pumunta bank, hindi sila pwede manguha ng gamit. If ever i-attempt nila, pwede sila makasuhan ng trespassing and harassment. As long as hindi mo co-signor yung Aunt mo, wala siya kinalaman sa utang mo. And if mag eskandalo kung sino sa harap ng house ng aunt mo, pwede niya ipadampot yung tao na yun kahit sino pa yan. Kahit lawyer pa yan
@Jie: it’s sad pero wala pang concrete fair debt collection act dito sa Pinas unlike sa U.S…. Pero try mo pa rin pumunta sa bank for settlement. Kahit once magrespond ka dun sa mga communication and tell them makikipagsettle ka sa bank. Para at least alam nila na may intention ka mag-pay. Just do your best to keep up with what you agreed on dun sa institution where ka may utang. pero aside from that, you’ll have to endure…. T.T
The reason I spend so much time reading on this blog is to get an idea different from the ones I’ve had myself. Thanks for sharing! I’ve learned a lot.