Debt collection is a topic around which there are many misperceptions. Understanding the reality can reduce worry in individuals facing debt-related challenges.
Debunking prevalent debt collection misunderstandings should put those who owe money in the right frame of mind to take action.
Myth 1. Debt collectors can arrest you
Contrary to popular belief, debt collectors do not have the authority to arrest anyone. Debt alone is not a criminal offense. Debt collection remains a civil matter, and individuals cannot face jail just for owing money.
Myth 2. Debt collectors can seize property without notice
While debt collectors are likely to seek repayment, they cannot arbitrarily claim your property. The law requires a formal process, such as obtaining a court judgment, before any such action becomes permissible. Debt collectors cannot just show up unannounced and take possession of your belongings.
Myth 3. Ignoring debt collectors will make them go away
Some believe that avoiding debt collectors long enough will make them give up. On the contrary, this approach can lead to worrying consequences. Pretending debt collectors are not hounding you does not make the debt disappear. In truth, it may result in legal action or damage to your credit score.
Myth 4. Debt collectors can add interest and fees arbitrarily
Debt collectors must adhere to specific regulations regarding fees and interest. They cannot add to the original debt without a legal basis. Abusing regulatory rules can result in massive consumer refunds, including an eye-popping $4.86 million in 2021. Understanding the terms of your original agreement and all applicable laws can help you assess the legitimacy of any unexpected charges.
By comprehending the true nature of debt collection, handling your financial situation should feel less frightening. With a full grasp of your rights and responsibilities, you can navigate the process and work towards a comfortable solution.