Introduction
Nobody wants the label of a defaulter, and various circumstances can push individuals to stop making payments. One of the primary reasons is job loss. Sometimes, collection agencies hired by banks to recover the money lent offer false or misleading debt settlements. However, these so-called “quitas” do not actually erase the debt; they merely stop contacting the individual temporarily. What should you know about negotiating a debt?
The Problem with False Debt Settlements
According to the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF), a common complaint is that individuals pay collection agencies directly for so-called “quitas” without informing the financial institution. Consequently, the debt remains active.
Who is CONDUSEF?
CONDUSEF is a Mexican autonomous public institution responsible for protecting and defending the rights of users of financial services. It ensures that financial institutions comply with regulations and promotes transparency in the sector.
Expert Advice: Ángel González
Ángel González, an expert in financial consumer protection, emphasizes the importance of documenting any debt negotiation with financial institutions in writing. He warns against falling for traps and false debt settlement offers from collection agencies.
How to Protect Yourself
- Document Everything: Keep records of all communication with the financial institution and collection agencies. This includes emails, letters, and phone calls.
- Formalize Agreements: Any debt settlement agreement must be formalized directly with the financial institution. Avoid dealing with collection agencies directly, as they may offer false quitas that do not resolve the debt.
- Understand Your Rights: Familiarize yourself with your rights as a debtor under Mexican law. CONDUSEF provides resources and guidance on these matters.
- Seek Professional Help: If you’re unsure about how to handle debt collection or negotiate a settlement, consult with a consumer protection organization or legal expert.
Key Questions and Answers
- Q: What happens if I pay a collection agency directly for a debt settlement?
A: If you don’t formally agree the settlement with the financial institution, your debt may not be resolved, and the collection agency may continue to pursue you for payment. - Q: How can I ensure a debt settlement is legitimate?
A: Always get any agreement in writing from the financial institution and avoid dealing directly with collection agencies. - Q: What should I do if a collection agency contacts me about a debt?
A: Request that all communication be directed to your attorney or a consumer protection organization. Do not engage with the collection agency directly. - Q: Can I negotiate a debt settlement myself?
A: While you can attempt to negotiate a settlement, it’s advisable to seek professional help to ensure your rights are protected and the agreement is legally binding.
