Page 25 - Book1E

CHAPTER 4
Debt Collectors and Fair Debt Collection Practices
Any of us who use credit cards, owe money on a personal loan, or are paying on a home mortgage are considered “debtors.” If we fall behind in repaying our creditors, or if an error is made on our accounts, we may legally be contacted by a “debt collector.”
There are three types of collectors. First is the credit grantor, second is a collection agency, and third is an attorney. Depending on the credit grantor, a credit counselor may be able to rescue the account before it goes to a collection agency. Most credit grantors will re-age the account or mark it “current” after several consistent payments.
If the account has been charged off, it may be forwarded to an in-house collection department or outsourced to a collection agency that either buys the account or is paid commission on the money collected. If the debt remains uncollected, the account may be referred to an attorney who takes legal action to collect missed payments.
For many families, the greatest benefit of a successful debt-free program is the elimination—or at least the reduction of—the intrusive and annoying calls from creditors. For those in debt crisis, answering the telephone can be unnerving. Family members develop a pattern of irre- sponsibility by refusing to answer the telephone, which can often lead to feelings of dishonesty, anxiety, aversion to duty, and an unhealthy view of their own self-worth.
17