Consumer debt remains a constant concern for many Texas residents in the post-recession economy. One of the problems cited by some debt holders concerns loopholes in the Fair Credit Reporting Act that allow some non-institutional creditors to delay billing and delay notification of negative credit reporting.
Consumers often see some of their debts transferred to a collections agency regardless of whether they have received a bill. The National Consumer Law Center claims that collectors then report the debt to a credit bureau directly, rather than trying to collect it, because it saves them money. When the consumer eventually needs access to credit for a large purchase, the agency can often obtain a debt settlement without expending any effort.
A debt settlement after such an item has been reported to a credit bureau may not remove the negative entry by itself. Consumers can dispute the debt with the credit bureau, which will then ask the collector for confirmation and remove the item should it fail to respond. Another tactic is to dispute the debt directly with the collector. Consumers can ask for proof of the debt and negotiate to have the item removed from the credit report.
If the option of debt settlement to repair credit standing places undue hardship on an individual or family, there may be better options. A credit card debt lawyer who has experience in these matters may be able to outline the debt relief alternatives in addition to filing for bankruptcy under Chapter 7 that are available to a consumer who is burdened by insurmountable financial obligations.