Recovery agencies are not deal with third-party debt settlement agency
7 months ago
I have a debt of 24 lakhs, which includes 6 credit cards and 4 personal loans. The monthly EMI is approximately 1.5 lakhs, and my salary is 48k. I have no assets or property to sell, and I am solely dependent on my salary.
So, I have hired a third-party debt settlement agency. They will take Rs. 20K every month, including their fee of 3 thousand, and deposit the rest of Rs. 17k in the bank as per their arrangement or agreement. However, recovery agents are still calling and visit my home address and saying that, as the agency is a third party, they will not talk to them. They insist that I must meet with them, and since the recovery agency changes every month, I have to continue this process every day. The debt settlement agency has already sent a mail to the banks stating that they are authorized to deal with the bank on my behalf.
Please advise on what I can do."
A.Dear Client,
Lenders are not legally obliged to settle a debt lowering your outstanding debt, but because they want to protect their bottom line, they may agree to a debt settlement to avoid further financial loss. You can try to negotiate a debt settlement on your own, but sometimes for some, financial constraints, it's typically done through third parties like debt relief companies, which you may hire to negotiate the settlement matter with the lender Bank on your behalf. But, it may be noted that while there are legitimate debt relief/settlement companies, there are also many scam operations. So, before hiring the service of a debt settlement agency, the Consumer Financial Protection Bureau(CFPB) suggests contacting your state Attorney General's office and local consumer protection agency to get feedback regarding the activities of the said agencies if they have any consumer complaints on file about that company. Some states require that debt settlement companies be licensed, which may provide some added protection to the hirer/Customer. So, facing their unethical and arbitrary demands you need to terminate the agreement/contract executed in the matter through service of legal notice and if the said debt settlement company is a registered Company under the Companies Act, 2013, then make a complaint before the Serious Fraud Investigation Office(SFIO), a wing of the Ministry of Corporate Affairs that investigates and prosecutes complex corporate frauds assigned under Section 212 of Companies Act 2013 on receipt of a complaint at its regional and/or head office at Delhi and other state capitals. So, based on the evidence and merit in your case, you need to consult with an Advocate to take appropriate legal steps in the matter.
Lenders are not legally obliged to settle a debt lowering your outstanding debt, but because they want to protect their bottom line, they may agree to a debt settlement to avoid further financial loss. You can try to negotiate a debt settlement on your own, but sometimes for some, financial constraints, it's typically done through third parties like debt relief companies, which you may hire to negotiate the settlement matter with the lender Bank on your behalf. But, it may be noted that while there are legitimate debt relief/settlement companies, there are also many scam operations. So, before hiring the service of a debt settlement agency, the Consumer Financial Protection Bureau(CFPB) suggests contacting your state Attorney General's office and local consumer protection agency to get feedback regarding the activities of the said agencies if they have any consumer complaints on file about that company. Some states require that debt settlement companies be licensed, which may provide some added protection to the hirer/Customer. So, facing their unethical and arbitrary demands you need to terminate the agreement/contract executed in the matter through service of legal notice and if the said debt settlement company is a registered Company under the Companies Act, 2013, then make a complaint before the Serious Fraud Investigation Office(SFIO), a wing of the Ministry of Corporate Affairs that investigates and prosecutes complex corporate frauds assigned under Section 212 of Companies Act 2013 on receipt of a complaint at its regional and/or head office at Delhi and other state capitals. So, based on the evidence and merit in your case, you need to consult with an Advocate to take appropriate legal steps in the matter.
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A.Dear Client,
Here are some steps you can consider:
Verify the Debt Settlement Agency: Ensure that the debt settlement agency you are working with is legitimate and registered. Check for reviews and references from others who have used their services.
Review the Agreement: Carefully review the agreement you have with the debt settlement agency. Understand their fee structure, the timeline for resolving your debts, and their responsibilities.
Communication with Recovery Agents: When recovery agents contact you, you can inform them that you have hired a debt settlement agency and provide them with the agency's contact information. Mention that you have authorized the agency to handle your debts on your behalf. Keep a record of all communication with recovery agents, including their names and contact details.
Cease and Desist Letter: If recovery agents continue to harass you, you can send them a cease and desist letter requesting that they stop contacting you. Make sure to send this letter via certified mail to create a record of your request.
Keep Records: Maintain a record of all payments made to the debt settlement agency and any correspondence with banks or recovery agents. This documentation can be essential if there are disputes in the future.
Monitor Progress: Regularly check with the debt settlement agency about the progress they are making in negotiating and settling your debts. Ensure they are following the agreed-upon plan.
Financial Counseling: Consider seeking financial counseling to manage your finances better and prevent future debt issues. They can help you create a budget and financial plan.
Legal Consultation: If you continue to face harassment or issues with recovery agents despite following the correct procedures, consult with a lawyer who specializes in debt-related matters. They can provide legal advice and guidance.
It's crucial to be proactive in managing your debt situation, but always ensure that you are working with reputable professionals and that your rights are protected throughout the process. Debt settlement can be a challenging journey, so stay informed and maintain clear communication with all parties involved.
Thank you.
Here are some steps you can consider:
Verify the Debt Settlement Agency: Ensure that the debt settlement agency you are working with is legitimate and registered. Check for reviews and references from others who have used their services.
Review the Agreement: Carefully review the agreement you have with the debt settlement agency. Understand their fee structure, the timeline for resolving your debts, and their responsibilities.
Communication with Recovery Agents: When recovery agents contact you, you can inform them that you have hired a debt settlement agency and provide them with the agency's contact information. Mention that you have authorized the agency to handle your debts on your behalf. Keep a record of all communication with recovery agents, including their names and contact details.
Cease and Desist Letter: If recovery agents continue to harass you, you can send them a cease and desist letter requesting that they stop contacting you. Make sure to send this letter via certified mail to create a record of your request.
Keep Records: Maintain a record of all payments made to the debt settlement agency and any correspondence with banks or recovery agents. This documentation can be essential if there are disputes in the future.
Monitor Progress: Regularly check with the debt settlement agency about the progress they are making in negotiating and settling your debts. Ensure they are following the agreed-upon plan.
Financial Counseling: Consider seeking financial counseling to manage your finances better and prevent future debt issues. They can help you create a budget and financial plan.
Legal Consultation: If you continue to face harassment or issues with recovery agents despite following the correct procedures, consult with a lawyer who specializes in debt-related matters. They can provide legal advice and guidance.
It's crucial to be proactive in managing your debt situation, but always ensure that you are working with reputable professionals and that your rights are protected throughout the process. Debt settlement can be a challenging journey, so stay informed and maintain clear communication with all parties involved.
Thank you.
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