There is a huge difference between debt consolidation and debt management (credit counseling). With debt consolidation you take a debt consolidation loan and pay off your creditors and end up with a new creditor and one payment. This does not impair your credit rating. If you enter into a debt management plan, your interest may be reduce or eliminated and will have to pay one payment to the credit counseling agency. The agency pays your creditors. Debt management impairs your credit rating.

No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.

The following practices are off limit to debt collectors. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:

• use threats of violence or harm,
• publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies),
• use obscene or profane language, or
• repeatedly use the phone to annoy someone.

Debt collectors may not lie (make a false claim) when they are trying to collect a debt. For example, they may not:

• falsely claim that they are attorneys or government representatives;
• falsely claim that you have committed a crime;
• falsely represent that they operate or work for a credit reporting company;
• misrepresent the amount you owe;
• indicate that papers they send you are legal forms if they aren’t; or
• indicate that papers they send to you aren’t legal forms if they are.

Debt collectors also are prohibited from saying that:

• you will be arrested if you don’t pay your debt;
• they’ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
• legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.

Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:

• give false credit information about you to anyone, including a credit reporting company;
• send you anything that looks like an official document from a court or government agency if it isn’t; or use a false company name.
• try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
• deposit a post-dated check early;
• take or threaten to take your property unless it can be done legally; or
• contact you by postcard.

If  debt collectors sued you or if your lender sue you, you shouldn’t ignore it. If you ignore the law suit it will result in default judgment. You would end up dealing with a different problem. It is hard to undo a default judgment.

If you are sued and you dispute the claim go ahead and file a defense. If you the money and in a position to make a settlement offer that your creditor has decline to accept, go ahead and file a defense and make the offer. Let the judge decide.

If you don’t pay a debt, a creditor or its debt collector can sue you to collect. If they win, the court will issue a judgment against you. The judgment states the amount of money you owe, and allows the creditor or debt collector to get a garnishment order against you, directing a third party, like your bank, to turn over funds from your account to pay the debt.

Wage garnishment happens when your employer is ordered to withhold 20-25% of your paycheck to pay your debts. Your wages usually can be garnished only as the result of a court order. Don’t ignore a “plaintiff Claim”. If you do, you lose the opportunity to fight a wage garnishment.

It is illegal for debt collectors to harass you or abuse. For example, they may not:

• Use threats of violence or harm,
• Publish your name as a person who refuse to pay its debts , but the debt collector can give this information to the credit reporting agencies,
• Use profane language or repeatedly use the phone to annoy someone.

It is illegal for debt collectors to make false statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:

• Falsely claim that they are attorneys or government representatives,
• Falsely represent that they operate or work for a credit reporting company,
• Misrepresent the amount your debt,
• Indicate that papers they send you are legal forms if they aren’t, or
• Indicate that papers they send to you aren’t legal forms if they are.

Debt collectors also are prohibited from saying that:

• You will be arrested if you don’t pay your debt,
• They’ll seize, garnish, attach, or sell your property or wages. Such action requires a judgment from the court, or
• Legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.

Debt collectors may not:

• give false credit information about you to anyone,
• send you anything that looks like an official court document

If you send the debt collectors a letter stating that you don’t owe any debt, or asking for verification of the debt (like copy of a bill for the amount you owe, signed receipts, etc…), that debt collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice.

The debt collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the debt, and how to proceed if you don’t owe the debt.

If a third party (attorney, debt Settlement Company) you about the debt, the debt collector must contact your representative, rather than you. If you don’t have a representative, the debt collector may contact other people to find out your address, your home phone number, and where you work – not to discuss your debt. Debt collectors are permitted to discuss your debt with you, your spouse, or your representative.

If a debt collector contacts you about a debt, you should talk to them. Ignoring them will make them furious and they go out of there to put you under undue pressure to pay your debt. Talk to the debt collector to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay your debt immediately, or think that the debt collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, write the debt collector a letter asking them to stop contacting you.

Here’s how to do that:

Make a copy of your letter. Send the original by certified mail, and ask for “return receipt Once the debt collector receives your letter, they may not contact you again, with two exceptions: a debt collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to sue you. Sending such a letter to a debt collector you owe money does not get rid of the debt, but it should stop the contact. Your creditor or the debt collector still can sue you to collect the debt.