Highly illegal unless given personal permission by the client or customer, creditor calls beyond the norm can be prevented by state and federal laws. But what exactly is the norm? By the time most nonpaying customers, either by choice or life's circumstances happens to receive collection creditor calls the creditor can become very ugly. For this reason, every attempt to make some sort of arrangements should be done before things get to this point, even though there are situations when the money is simply not there.
The Fair Debt Collection Practices Act (FDCPA) limits the type of legal practices that can be practiced by debt collectors, recognizing that abusive debt collection practices—such as creditor calls--actually have a lot to do with the increase in personal bankruptcies, in marital instability, in the numbers of job loss, and with invasions of individual privacy. Most people do not go into debt on purpose, or for something to do because they are bored. Many situations are at fault: lost jobs, a drop in household income, emergency situations, or death in the family of a major income source.
Creditor calls, depending on the situation, are not the only legal way debt collectors can reach their clients. They actually can contact any friend, family or employers, as long as they do not refer to the debt involved, or imply they are a debt collector. If the client has hired a lawyer, the debt collector cannot make creditor calls or personal visits, but instead is to contact the attorney only regarding the debt. If the creditor is allowed to call, they cannot call before 8 a.m. or after 9 p.m. the client's time. And the most important law to follow is that they cannot call the employer of the client, unless the client gives permission.
The real problem is that most debt collectors realize, or think, that most people cannot afford to take them to court, or have to time or energy to do so—therefore, they do many things that are illegal. But once a person files bankruptcy then the contact is in contempt of a federal restraining order, or "automatic stay". The only way a debt collector can make creditor calls after bankruptcy is if that particular debt escaped the discharge and is not on the bankruptcy list.
What spurs most debt collectors on is that most of them get about 25% of whatever is paid to them—which makes their goal a monetary one, to get a percentage of your money as part of their own income, which accounts for the cut-throat tactics used by many. In the initial stages of collection it does not matter to them whether the bill amount is correct or not, because the collectors of debts will accept the computer amount first. And besides, most of the bill notices that come in the mail are simply computer generated with no signatures involved, but instead having a signature stamp on it.
The word contingent refers to "likely" or "possibly", therefore a contingent creditor would seem to be defined as a creditor with "a creditor event or condition that is likely but not inevitable." But in the credit field, a person is a company's creditor if money is owed to that person. This person has provided some sort of services or goods to that company, or even made financial loans to the company. In fact, someone who works for a company, owed money for unpaid wages and so on, is considered a creditor.
But a contingent creditor is one who may be owed a certain amount of money, if certain events are to occur—such as successfully laying a legal claim against the said company. There are several types of creditors: related, secured, and contingent creditor. To help define the term "contingent creditor," looking at a contingent asset may help as it would have an opposite meaning.
An asset that is contingent is an asset that is potential, associated with a possible or likely gain. This is different from a contingent liability or contingent loss, as the assets and gain that are contingent are not recorded in the company's accounts. In other words, a contingent liability is a potential liability—and a contingent creditor is a potential debt collector. One example used to explain it better was the purchase of a card for a grandchild. Obviously, the car is guaranteed to be paid by the grandparents, signing on the grandchild's first loan as co-signers. If the grandchild pays the loan off on time or even earlier, there will be no liability toward the grandparents. But if the grandchild fails to make the payments, the grandparents will have a liability against them. A contingent creditor is claimed if the company finds the grandparents guilty of non-payment, instead of the grandchild as the loan papers were signed by the grandparents, not the grandchild.
The term contingent creditor refers to a case or situation that may happen, but yet is not finalized in court. Many cases have such situations, such as individual death, loans, banks, loan companies, and so on. A contingent creditor refers to a bank or company who files a lawsuit against a particular company which has a contingent liability or loss contingency. A liability and loss against the company is filed only if the company is found legally guilty of non-payment. If the company is found non-guilty for whatever reason, the contingent liability is not considered an actual liability or loss. Therefore, until a company goes to court, the term contingent creditor plays a big factor on what is owed or needs to be paid by the company in debt.
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