Consumer Debt Collection: Tips and Insights from National Collections Lawyers

Consumer Debt Collection: Tips and Insights from National Collections Lawyers

There are some key differences between consumer and commercial debt, along with differences in how to collect those debts legally. Collecting consumer debt poses more of a challenge, according to a trusted nationwide debt collection lawyer with experience. Keep reading for some surprising and informative tips, insights, and legal strategies on how to handle consumer debt collection cases best, whether the consumer debtor is local or if there are multiple debtors based in different areas of the country.

Insights into Consumer Debt Collection Challenges and Opportunities

While commercial debt and consumer debt sound similar, there are some crucial differences that one must take into account when wanting to pursue those owed debts in an ethical, responsible, and legal manner. The two types of debt include:

1. Commercial Debt

A commercial debt is owed money from businesses already receiving services or goods. The collection process for commercial debts is a bit more complicated than pursuing consumer debt in most cases. Commercial debtors typically have longer to repay their debt to others, but that varies due to various factors. There can also be multiple business partners or other parties for creditors to pursue, such as vendors, business contractors, and multiple suppliers of goods that the company uses. Large companies often have greater financial means and other valuable resources than the average individual consumer, which allows them to legally challenge and fight debt collection processes.

2. Consumer Debt

Consumer debt deals with an individual’s debts that are usually less expensive than the alternative commercial type of debt. Some examples of this type include student loans, credit card balances, and medical-related bills. However, rising interest costs, higher cost-of-living expenses overall, more consumer reliance on credit, and steep medical costs make these debts much more common than in previous decades and generations. There are some specific challenges when it comes to collecting consumer types of debt. These challenges include:

• Greater government oversight of late
• Strict rules and regulations regarding collection processes
• More repayment or other debtor options that creditors must honor
• There is a greater chance for creditors to be charged with harassment or unfair collection practices
• Difficulties in finding contact details of debtors
• Evasive tactics are used by many debtors to avoid repayment obligations.
• Limited resources and time for creditors seeking collection on owed debts

Ethical and Effective Strategies for Dealing with Consumer Debtors

Debts incurred by individual consumers pose some ethical challenges for creditors seeking money owed. While commercial forms of debt usually allow the attorney to deal mainly with the other party’s legal team, consumer-related debts often require the creditor to speak directly with the debtor. It is due to this, and other closely related reasons, that the Fair Debt Collection Practices Act was initiated. This legal guide strictly regulates how a creditor contacts the other party. In the past, debt collectors routinely used robotic and other harassing calls that did not have today’s limits on the times they can call, where they can call, and how often they may call in a given period.

Ethically, a creditor must be careful who they call and speak to regarding owed debts. Unless given permission, a creditor must cease calls to a debtor’s workplace, neighbors, or other parties if the debtor formally asks them to stop these contacts. However, there are still legally allowed tactics that a trained and knowledgeable attorney can utilize to gain contact and effectively resolve owed debts. Hiring an attorney who specializes in this law area is the best way to help ensure that any creditor contact to get repayment is truly legal and not something that could be construed as harassment by the debtor.

Creditors are also banned from engaging in deceptive collection practices spelled out under these regulations. This also includes not disclosing sensitive types of personal information about the debtor to a third party. There are certain time constraints that all creditors must adhere to when attempting to recover owed debts. These regulations are subject to change, and various states have also enacted specific laws and rules that govern debt-related collection practices in their geographical regions.

Handling Sensitive Consumer Debt Situations with Professionalism

Some debt collectors leave garbled or threatening messages to scare the debtor into compliance. However, this could backfire, and the original creditor may be held liable in some situations if the debtor has the legal grounds to sue for harassment or other unfair collection of debt strategy. The good news is that some cases have been upheld in the federal courts that have sided with the creditor. For many reasons, choosing an experienced lawyer familiar with all phases of collecting debts from consumers is a smart move. These professionals are trained in the fine art of negotiation using polite but clear communication with parties with differing viewpoints.

A reasonable attorney will also be fully aware of the need to be cautious with any communication tactics, and they are more likely to employ more effective communication techniques designed to resolve outstanding debts owed to their clients. In addition, working with an attorney means that moving forward with more aggressive collection tactics, such as suing the debtor in court, may proceed without needless delays that could harm the chances of full debt recovery results.

Legal Protections for Consumers and Businesses Involved in Debt Collection

Other legal protections exist for businesses and consumers involved in collection proceedings for owed debt. A skilled attorney will know these legal options and are less likely to make costly mistakes that could negatively impact their clients in their endeavors.

Find Helpful & Effective Legal Assistance from a Consumer Debt Collection Lawyer Soon

Learn more about nationwide and other debt-related collection practices and other legal services offered by National Collections Lawyers | Commercial & Consumer Debt Collectors by visiting our online website anytime.Book a free consultation with us here. Our team does not get paid unless successful with our collection of debt efforts, and this motivates us to perform exceptional work at all times.