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Debt Management Law News

February 2, 2010

How to Eliminate Credit Card Debt by Stopping a Junk Debt Buyer’s Attempt to Collect It from You

Every consumer should know that invoking current consumer protection laws will stop the collection activities of a junk debt buyer and eliminate credit card debt they claim against the consumer.

Junk debt buyers invest in discharged credit card debt for pennies on the dollar. They also sell and resell the debt they have purchased to other junk debt buyers for smaller and smaller sums of money. Business Week, as an example, reported Portfolio Recovery Associates, a large national junk debt buyer, paid $791.6 million over an 11 year period for $35.3 billion of debt in 16.7 million customer accounts. For each dollar of credit card debt that averages less than three cents.

According to the Credit Card Debt Survival Guide, those numbers indicate a junk debt buyer does not have to collect on even half of the debt purchased. They would be quite profitable, if they collected on a third of the debt. Does that mean the other two-thirds of consumers eliminate credit card debt by successfully resisting a junk debt buyer?

Junk debt buyers are relying on most consumers\’ ignorance of the federal Fair Debt Collection Practices Act (FDCPA) and similar state laws. When a collection agency for a junk debt buyer sends out thousands of dunning letters to discharged-account holders, most recipients do not reply in writing demanding validation of the debt. If only they did, because the junk debt buyer can produce little documentation from the original creditor to substantiate the debt and the consumer could eliminate credit card debt.

When contacted by telephone and bullied with a false lawsuit, many consumers out of honesty and ignorance of the FDCPA admit to the undocumented debt and make the debt collector\’s task easier.

While the debt collection attempts of the original-creditor credit card companies are not covered by the FDCPA, those of junk debt buyers and their collection agents are. With a carefully worded letter, like those found in the Credit Card Debt Survival Guide, the consumer can eliminate credit card debtby compelling these debt buyers to cease collecting the alleged debt. Legally, that includes not placing negative marks on the consumer\’s credit report.

Sometimes, debt can be overwhelming, and bankruptcy becomes necessary.
Bankruptcy can sometimes be difficult. If you are considering bankruptcy, contact the Houston bankruptcy lawyers of Weston & Associates, PLLC at 713-623-4242

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