Collecting On Credit Card Debt
Unfortunately, the creditors that are the most obnoxious and aggressive are the ones that have the least legal leverage of collecting the debt. These are the unsecured credit card company creditors and their legions of over zealous collectors of credit card debt.
Lenders without a security interest are referred to as “Unsecured Creditors.” Unsecured creditors rely solely on the borrowers promise to repay the debt voluntarily and have no recourse other then to sue you on the debt and report you to the national credit agencies.
Most credit card debt is unsecured. Which means that in order for a credit card company to collect the debt they must become a judgment creditor which takes time and money. Without having a secured interest, the credit card company is never allowed to repossess what was sold to you. Doing so is highly illegal . It is considered “self-help” which is both a civil and criminal offense.
Most credit card companies, when a debt has reached a certain level of delinquency and is deemed uncollectable, will write off the debt, assign it to a collection agency which takes as much as fifty-percent of whatever it can collect from the debtor.
The collection industry is multi-billion dollar business. Collection agencies will first try to harass you into paying the credit card debt, and/or if the debt amount is big enough, and your employed or own real property, they may choose to file a lawsuit and once obtaining a judgment against you will attempt to garnish your wages and/or levy your bank accounts, or lien your real property. Once a judgment is secured and perfected, a collection agency might join other judgment creditors to force you into involuntary foreclosure proceedings.