When a person doesn’t pay their bills, for whatever reason, the credit grantor has the right to determine when to send the debt to collections.

Creditors may first attempt to collect the debt themselves until they feel it is useless; then they will assign the debt to a collection company. This company then has the right to contact the person and make arrangements for payments to be made. What the collection company does not have the right to do, as per the Fair Debt Collections Act, is harass in any way, such as calling before a reasonable time in the morning and after a reasonable time in the evenings. They cannot bully, threaten or be rude in language or lie about what will happen to the person if they don’t pay.

A person in debt is usually not paying because they can’t, not because they won’t, or because they have some complaint against the debt company. These instances are very rare. The person usually has lost a job, had a medical problem, or some other challenge that has reduced income to the point where they are forced to scrape by for the necessities of life, such as food, shelter and transportation, rather than pay off things that will not sustain them. The current laws are to protect the consumer from predatory collection companies with unscrupulous practices in collecting debts.

I have found that approximately 50% of all collections are scams and the companies that go after them are scammers. It is important to find out who is legitimate and who are the scammers.

If someone calls and refers to a debt that you once had, while demanding payment and threatening arrest or bodily harm, but do not have the name of a company, only an amount, this is a scam. How do you know if this company is legitimate? Where is the proof?

Never make payments unless you have proof that the debt is really yours and that the collection company has the authority to collect a payment from you. This would mean asking them for proof; if they get belligerent then they are probably a scam company. A legitimate collection company will no only be polite, they will also send you proof in the mail that include documents proving the debt is yours. This is when you can negotiate a payoff, or payments, to get the debt paid.

Collections on a credit file are very damaging and multiple collections can be damaging to the tune of costing a 100 or more points. Collections can be updated to reflect newness at anytime during their stay on your credit file. In other words, if a collection has been on your credit file for 6 years and then someone requests info on that collection, the collection company can update the “last activity” date and cause the collection to look like it is new, once again damaging your credit scores.

The solution is to get the collection paid off and then to get it removed.

By removing the collection, your credit file will look as though there never was a collection. It will be gone and your credit scores will reflect the change by jumping up. Even if you just paid the collection off, it should show a rise in scores; ALTHOUGH, that can also be countered by the “last activity” update if the collection is an old collection. It’s possible that this could drop your credit scores because you paid it off and then updated the dates.

Not always fair but that’s how it works. This is why I suggest you pay the collection and then get it removed.

A mail box is a great way for thieves to steal your identity.

If possible, get your mail into the house as soon as the mailman comes. This can help to avoid some random thief stealing your mail and digging through it for your identity information or, even worse, grabbing checks or credit cards that have been sent by mail.

Having a locking mail box would certainly help to deter thieves who want to get to your mail for identity theft purposes.

Also, using a post office box can be a great way to avoid leaving mail unattended and losing it.

When dealing with financial companies or any companies that could have your financial data it is important to ask not only how long they keep your personal information, but how they keep it, who they share it with, and when and how they will destroy the information once they are done with it.

It’s not impolite to ask these questions; make certain you get real answers instead of brush offs and/or a dismissal.

Be active in getting this information. Do not deal with a company that will not give answers or one where you feel uncomfortable with how they are dealing with you and your information.

If the company seems shoddy, then they perhaps have shoddy practices in protecting your identity data.

Act on your instincts.

One question that comes up often is how long to keep records and when to destroy them?

The key here is not throwing out records, but destroying them!

I have heard horror stories of criminals who search through garbage cans (and even the dump!) to find documents that include important financial records. These records are then used by said criminals to steal money from bank accounts, start up new credit cards, max them out, leaving someone like yourself holding the bag. These thieves can even use your identity for things like medical procedures, etc.

It is important to destroy, burn, shred, incinerate, vaporize these documents so that no one can use them without your consent, and/or against you, for any reason. More and more it is absolutely important for you to take necessary steps to protect your identity.

Now, how long should a person keep these kinds of document? That depends.

Real Estate

• If you have documents that pertain to real estate that you own, they should be kept indefinitely. That means always. Let your children destroy them after you are gone. There are instances of having to prove real estate ownership even after the property was sold and even though a Title company supposedly recorded deeds and titles. It doesn’t take up much room but worth the effort if it ever comes up.

Tax Records

• The IRS says to keep documents for 4 years but I say 7 just to be sure on anything that you would need to prove in a court of law and protect yourself against the IRS.

Anything Else

• As for documents that are just lying around with person information on them (that do not need to be kept for IRS or Real Estate records), destroy them. Immediately. This will keep your identity safe from theft.

In review, there are numerous ways a thief can find and steal your identity.

We have just covered looking through garbage, but thieves can also take your mail, or even break in to your home and steal it right off your desk. There are even cases of supposed friends finding valuable information, tucking it away in a pocket, and using it later. (So much for supposed friends!)

Now, I am not suggesting you push your friends away, but rather, put your personal identity mail and paperwork away so that honest people are not tempted and dishonest people can never find them.