How Debt Collectors and Collection Law Firms Operate

Generally, there a two types of debt collection agencies. A collection agency that pursues payments of debts from consumers on behalf of the creditor (credit card, mortgage debt, medical debt etc.) are called “Servicers.” A Servicer is usually a law firm that is hired by the debt owner to try and collect the debt and they receive a fee or percentage of the total amount owed. Some examples of Servicer law firms would be Weltman, Weinberg and Reis, Shermeta Law Group, Weber & Olcese or Raush Sturm.

The second type of collector is the “Owner” or debt buyer of the debt after the debt has been written off (“charged off) by the original creditor. This means that the debt collection buyer bought the debt (often for pennies on the dollar), from the company that was originally owed the money. Sometimes, the debt collector and the owner of the debt are the same, usually called Junk Debt Buyers. Some examples of debt buyers would include Portfolio Recovery Associates, Crown Asset Management, Midland Funding or Midland Credit Management, Jefferson Capital Systems, DNF & Associates, Cavalry SPV I, LVNV Funding, SLM and Navient.

Debt collection agencies are required to contact the debtor (within five days of their first contact) with all the rights granted by the FDCPA. You have the right to dispute the debt or seek validation within 30 days of receiving the validation rights mandated by the FDCPA. These are called your dispute/validation rights. Unless you dispute the debt, the debt collector can continue collection efforts including suing the debtor. Seeking validation that the collector has the right to pursue you stops any further collection effort until they provide proper proof. Validation Request Letter ( Click to download ).Sending a Cease and Desist Letter ( Click to download ) is an option too. If they continue to violate your rights, we can help. Please fill out our Free Evaluation form or call us at (248) 342-9583.

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