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USA Debt Recovery
If you are paying on a home loan, owe money on credit or store cards, or have a personal loan then you are considered to be a debtor. If you fail to pay your debts, you could be contacted by a debt collector. In the USA, debt recovery is normally done with the aid of debt collection agencies. These agencies work to recover debts on behalf of the creditor.
USA debt recovery has evolved into a big business. This is because it has become so easy to obtain credit and store cards. Banks and large shops are no longer as stringent as in the past. Many people fail to plan financially and end up spending much more than they can afford. They then become overwhelmed by an accumulation of bills at the end of the month, and simply fail to pay.
Although creditors are entitled to recover their debts, debtors are also protected by laws in the USA. Debt recovery agencies have gained the reputation of sometimes engaging in unsavory behavior, such as using threats and harassment. United States Federal Law now regulates debt collection agencies. The Fair Debt Collection Practices Act ensures that debtors are treated fairly by debt collectors.
Debt collection agencies that show noncompliance to the act could end up with lawsuits, fines or even be closed down. There may also be other laws restricting debt collection depending on the different states in the USA. Debt recovery agencies will have to conduct business according to the laws that govern the state in which they are located as well as the laws of the states in which the debtors reside.
The legal system will also assist debt collection agencies within the USA. Debt recovery agencies can sue the debtors for the amounts owed. This entails hiring a collection attorney who has good experience in debt recovery. The attorney will file a lawsuit against the debtor with the court. The debtor then has a limited period in which to respond to the lawsuit. The type of response is dependant on state law.
If a judgment is granted by the court against the debtor, then the collection agency’s attorney is empowered to obtain the money from the debtor. In the USA, debt recovery with a judgment is most commonly done with an order of garnishment. This means that the debtor’s employer will be required to deduct a certain percentage of the debtor’s wages. This amount is then handed over to the court, and in turn to the collection agency’s attorney.
There are many other regulations governing USA debt recovery with regard to garnishment orders. The creditor can also obtain a judgment against the debtor’s assets. These assets would include property, motor vehicles and bank accounts. The court will sell the assets and the proceeds, minus any fees, will be handed over to the creditors. Any remaining funds will then be returned to the debtors. Although there are laws in place to protect debtors in the USA, debt recovery can become a messy business. It is therefore best, as a consumer, to ensure that you are able to repay debts on time.