The Nevada Sagebrush

Credit cards can be handy, especially when you’re living paycheck to paycheck and need just a little extra to get you through.

The problem is that most of us don’t pay off that little extra the following month — we add to it. We then add more and more to it until we’re neck deep in credit card debt that seems impossible to pay off. Your monthly minimum goes up, and soon you can’t even pay that.

If you default on your monthly payments enough, the credit card companies consider you a liability. If you become too big of a liability, they bring in a collection agency. It’s the collection agency’s sole purpose to track down debtors and make them pay. It’s the same concept as Dog the Bounty Hunter.

Collection agencies typically make their money by taking a percentage of what they collect or by buying the debt from the credit card company. If you’ve been turned over to a collection agency, you will receive letters and phone calls which, very frankly, try to pressure you into paying immediately.

While the collection agency may seem to have a lot of power, it’s important to remember that collection agencies have limits. They cannot seize your assets, get you fired or publicly announce your debt.

Furthermore, the Fair Debt Collection Practices Act (FDCPA) gives the debtor the option of writing a letter to the collection agency telling them to cease all communication. They can only contact you to let you know that they have stopped trying to collect or that you may be sued. Doing this isn’t always the best option, so you should talk to an attorney or a debt counselor before proceeding.

But there are two things that a collection agency can do that are very serious. The first thing is to report you to the credit bureaus. This may affect your credit score and have serious long-term effects. The second thing they can do is sue you.

Unfortunately, many people don’t take their debt or the collection agency seriously until they’re served with court documents. When you’re sent to court for credit card debt, you receive what is called a “Summons.” It’s very important to know that you must respond to this “Summons”immediately with what is known as an “Answer,”usually within 20 days.

For more information about filing an answer, talk to ASUN Legal Services in the Joe Crowley Student Union.

If you fail to respond to the “Summons,”the court issues a default judgment, which means that the collection agency gets what they want. This can be appealed, but only within a reasonable period of time.

If you can, work with the credit card company, a credible debt reduction service or the collection agency before things get too far. Don’t avoid your debt — it only makes things worse in the long run.

Kaitlin Brush is the ASUN Legal Services Director. She can be reached at legal@asun.unr.edu or at 784-6132.

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