In order to get money from people who owe debts, bill collectors are telling people to refinance their home, take out a second mortgage, borrow against their 401k (or other retirement plans), borrow from relatives, and so on.
One client had a creditor tell her she had $xxxx.xx amount of available credit on the credit card he was trying to collect on and for her to take out a cash advance against the card to make a payment that month. The debt collectors are really pushing the envelope! Don’t do any of the above. Your home is not an ATM machine. Your retirement funds are exactly that – for retirement. Besides, if you take an early withdrawal you will be hit with tax consequences. And, DO NOT give them post-dated checks or allow them to take a post-dated ACH payment. Many bill collectors will tell you just about anything to get paid. Typically, bill collectors get a percentage and/or commission on the amount you pay to them or they have a quota to meet in order to keep their job. They don’t care where you get the money – just pay them.
Last week I contacted a bill collector at a lawyer’s office to let them know I had been retained by a certain client. The employee said “Does this mean they are not going to borrow money from their 401k to pay us?” I replied, “Absolutely!”
Before you do anything to pay a bill collector that will put your future in jeopardy – please consult with an attorney to learn what your rights are. Protect yourself and your family – your creditors certainly will not.
