Dealing with Carmel Financial/New Coast Direct Debt Collectors
You’re here, because you’ve likely received calls, letters, or emails from Carmel Financial or New Coast Direct regarding an outstanding debt. Dealing with debt collectors, can be stressful and overwhelming. But, take a deep breath. We’re here to guide you through this process step-by-step.
First, let’s understand who these companies are. Carmel Financial and New Coast Direct are third-party debt collection agencies. They purchase delinquent debts from original creditors for a fraction of the amount owed. Their goal? To collect the full balance from you, plus interest and fees.
-Now, you might be thinking, “But, I don’t even remember that debt!” or “That can’t be right, I already paid that off.” Don’t worry, we’ll address those concerns shortly.
Before we dive in, remember, you have rights under the Fair Debt Collection Practices Act (FDCPA). Debt collectors must follow specific rules when attempting to collect a debt. If they violate these rules, you can take legal action.
Validate the Debt
The first step, is to validate the debt. Under the FDCPA, debt collectors must provide you with a written notice containing:
- The amount of the debt
- The name of the original creditor
- A statement that you have 30 days to dispute the debt
If you don’t receive this notice within five days of the collector’s initial contact, you can request it. Once you have the notice, review it carefully.
-If the debt doesn’t look familiar, or you believe you’ve already paid it off, you have the right to dispute it. Send a written dispute letter to the collection agency within 30 days of receiving the validation notice.
In your dispute letter, clearly state that you’re disputing the debt and request evidence that you owe the amount claimed. The collector must then provide verification of the debt, or cease collection efforts until they can provide proof.
Negotiate a Settlement
If the debt is valid, your next step is to negotiate a settlement. Collection agencies often purchase debts for pennies on the dollar. So, they may be willing to accept a lump-sum payment for less than the full balance.
A good starting point, is to offer 25-50% of the total debt as a settlement. For example, if you owe $5,000, you could offer $1,250 – $2,500 as a one-time payment to settle the debt.
When negotiating, be firm but polite. Explain your financial situation and why you can’t pay the full amount. But, don’t give too many personal details that could be used against you.
-Get any settlement agreement in writing before making a payment. The agreement should clearly state that the debt will be considered “paid in full” and that the collector won’t pursue further action.
Request Debt Validation from the Original Creditor
If the collection agency can’t provide adequate proof of the debt, or you suspect the debt has been paid or is past the statute of limitations, you can request debt validation from the original creditor.
Under the FDCPA, the original creditor must provide you with specific information about the debt, including:
-- The name and address of the original creditor
- The account number associated with the debt
- The amount of the debt when it was charged off
- The date of the last payment made on the account
- A copy of the last statement sent to you before the debt was charged off
If the original creditor can’t provide this information, they may have violated the FDCPA, and you could have grounds for legal action.
Know Your State’s Statute of Limitations
Each state has a statute of limitations on how long a debt can be collected. This time period varies by state and type of debt, but it’s typically between 3-6 years for most debts.
If the debt is past the statute of limitations in your state, the collector can still attempt to collect, but they can’t sue you or report the debt to credit bureaus.
However, be cautious about making any payments on an old debt, as this could “revive” the debt and restart the statute of limitations clock.
Dealing with Harassment
Debt collectors are prohibited from using abusive, deceptive, or unfair practices when attempting to collect a debt. This includes:
- Calling before 8 a.m. or after 9 p.m.
- Using profane or obscene language
- Threatening violence or harm
- Calling you at work after being told not to
- Discussing the debt with third parties
- Misrepresenting the amount owed or their authority
If a debt collector engages in any of these practices, send them a cease and desist letter demanding that they stop all contact immediately. Keep detailed records of any further contact, as this could be used as evidence of harassment.
Consider Credit Counseling or Bankruptcy
If you’re struggling with multiple debts and can’t seem to get ahead, you may want to explore credit counseling or bankruptcy.
A non-profit credit counseling agency can help you negotiate with creditors, set up a debt management plan, and develop better money management skills.
Bankruptcy should be considered a last resort, but it can provide relief from overwhelming debt and allow you to make a fresh start. Consult with a bankruptcy attorney to understand your options and the potential consequences.
Stay Calm and Protect Your Rights
Dealing with debt collectors can be incredibly stressful. But, remember, you have rights under the law. Don’t let collectors intimidate or bully you into making payments you can’t afford.
If a collector violates the FDCPA, you may be entitled to statutory damages of up to $1,000, plus attorney’s fees and court costs. Consulting with a consumer protection attorney can help ensure your rights are protected.
At the end of the day, your goal should be to resolve the debt in a way that’s fair and manageable for your financial situation. With patience, persistence, and knowledge of your rights, you can navigate this process successfully.