 | One of the main reasons debt collectors are so darn persistent (and can be quite aggressive at times) is money. Most of them are paid according to the amount of money they collect: The more they bring in from what you owe, the more they earn; if they collect nothing on your debt, they get nothing. Other bill collectors actually purchase your bad debt from the original creditor. Logically, these working people need to recoup the investment they've made by purchasing your past-due debt. |
Unfortunately, most consumers don't have a clue about their legal rights related to repaying financial obligations. Debt collectors are more than willing to push the legal envelope because experience shows that a lot of people will pay at least a portion of what they owe if someone harasses them enough and scare them into submission.
If the debt collector's phone calls and letters don't get you to pay your past-due bills, he has to invest additional time and money to take further action. This situation applies specifically to the collection of unsecured debts, like credit card debts or unpaid medical bills. When you acquire an unsecured debt, you don't have to give the creditor a lien on one of the assets you own (which would give the creditor an automatic right to take the asset if you didn't pay your debt). If you can't or don't pay a past-due unsecured debt, the debt collector has to sue you for the money, which costs him time and money. If you lose the lawsuit, the collector has to try to get his hands on the money you owe by doing one of the following:
- Seizing one of your assets (assuming you have an asset that the debt collector can take)
- Having your wages garnished (if your state allows wage garnishment)
- Placing a lien on one of your assets so you can't sell it or borrow against it without paying the debt first
All three options cost more time and money. If your debt is small, the debt collector may decide it's just not worth the effort to sue you; his time is better spent going after other consumers with debts that he thinks will be easier to collect. The same is true if you are judgment proof, meaning that you don't have any assets the debt collector can take or put a lien on, you are unemployed, or your state doesn't permit wage garnishment.
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