Escaping Debt: Consumers Considering Moving Abroad

moving_to_a_foreign_country_practical issues

Debt can be overwhelming. While most people don’t intend to enter into a debt that they cannot repay, life gets in the way, and things happen that are outside of our control.

For some with a very large debt, it may be tempting to escape it; some people even take extreme measures by moving to another state or country. Here we’ve broken down some of the most common questions about the collection of debts in the United States and abroad.

What happens to my debt when I move to another state?

Assuming you have been found liable for your debt and there is a valid “judgment” for it recorded in the state in which you live, the collections company will get a triple sealed authenticated copy of that judgment and mail it to a collections company in the new state. The company will file a new action called a filing for a foreign judgment. Even if you have not yet been found liable for your debt, these proceedings can occur at a later date, even after you have moved to another state.

What happens to my debt when I leave the country?

Debt remains outstanding until it is paid, and interest and penalties continue to accrue. While it is technically illegal for a creditor to sue you in a country or state in which you no longer reside, sometimes this issue rests on the language of the contract or the sentiment of the court. Most contracts and loan agreements specify in which states legal arguments and court cases must be settled.

If a lawsuit against you does go uncontested while you’re away, the collections process will continue as it would if you were stateside. Leaving the country can cause serious problems with your credit rating if you do decide to return. Creditors can begin the judgment process on your last known address (despite legality), and your debt will be waiting for you if and when you return.

If you still have assets in the country, the creditor can secure these as partial payment. You could return to a judgment against you or the repossession of your belongings. The IRS expects U.S. citizens to file tax returns and pay what is owed. If you leave the country with unpaid debts, eventually those balances will be written off and your creditor may file a 1099-C form with the IRS reporting these unpaid amounts as “income.” The IRS will expect payment of this phantom income.

Another consequence of leaving the country could be causing the burden of your debt to fall on your family or co-signer(s). In addition, a collector could sell your debt to an agency in another country, and foreign creditors can order a copy of your United States credit report.

Are contracts for debt enforceable outside of the United States?

Contracts for debt are not enforceable outside the United States. So essentially, it is true that leaving the country is a way to leave your debts behind. While foreign countries will not seek to extradite you for debt, there are other actions that may be taken.

Some debt collection agencies operate in multiple countries, expanding their reach. However, that is not typically the case. You may find that the country you’ve chosen has a reciprocal agreement when it comes to tracing debtors, like Germany, Canada and the UK. HM Revenue & Customs, the UK’s tax and customs authority, has a long reach. HM has a mutual assistance agreement with several countries to recover money owed.

While relocating may help you outrun your debt, it is not as simple as it sounds. Not only will you have to come up with the money to purchase a plane ticket, invest in housing and sustain yourself, but if you plan to stay in a foreign country for a long period of time, you will have to secure residency, which requires income. You have to prove that you have a reliable source of monthly income to meet the country’s minimum requirements.

Also, lenders are not as generous and quick to extend credit in other countries as they are in the United States. If you have become accustomed to using your credit card when money gets tight, building a new and better credit history elsewhere may prove difficult.

In the News 02/24/2015

DriveTime Automotive Group, Inc. has recently been accused of debt collector harassment and agreed to an $8 million settlement to reconcile charges of violating the Fair Debt Collection Practices Act (FDCPA). The charges brought against the company after an investigation by the Consumer Financial Protection Bureau (CFPB) alleged that they lacked an adequate written policy for their bill collectors, which led to collector harassment, as well as inaccurate reporting of current balance information on accounts, timings of repossessions and dates of first delinquency.

The report issued stated that DriveTime, which has dealerships across the country, had only two employees assigned to handle up to 22,000 disputes each year. Accusations of calling consumers at work and after receiving cease contact requests were also included in the charges.

Read more here:

8 Ways to Recognize a Debt Collection Scam


As we’ve discussed in previous posts, government agencies have been created and charged with overseeing and policing debt collection agencies and law firms due to illegal and unethical collection practices.

However, their responsibilities also extend to notorious debt collection scams, which have affected thousands of people and garnered millions of stolen dollars. When someone calls you imitating a collector, they may have already accessed your personal information through identity theft or by obtaining your credit report, but there will still be signs if the caller is a fraud.

Here we’ve listed a few ways to recognize a debt collection scam. Do not provide personal information if any of the following tactics are used:

  1. The caller uses fear or harassment to urge you to pay the debt. Licensed and trained debt collectors know that the use of abusive tactics is illegal and punishable under the Fair Debt Collection Practices Act (FDCPA). If the caller-in-question threatens you with an immediate lawsuit, a call to the police or possible arrest, they are most likely not a legitimate collector.
  1. The caller demands that you pay today or in the very near future, with no offer of a payment plan. Compassionate collection practices suggest that consumers be offered monthly payment plans if they are unable to pay their debt in a lump sum. A caller suggesting that you are required to pay your debt all at once is suspicious.
  1. The same person calls you multiple times or answers the phone every time you call. Most collections agencies have a variety of employees working on each case and a receptionist that transfers incoming calls to the appropriate extension. If you have been interacting with the same person during every phone call (both received and placed by you), ask to speak to someone else. If the caller refuses, you may be speaking with a debt collection scammer.
  1. They offer only one form of payment. Every collections firm and agency is interested primarily in collecting money; thus, they will typically accept a variety of payment options including personal checks, online payment with a debit or credit card, money orders or bank ACH. Scammers often encourage you to pay with a credit or debit card over the phone.
  1. They cannot provide an address. If you are suspicious of the caller, ask them to provide their mailing address for you to send a personal check. If they cannot provide you with basic information like an address or return phone number, hang up.
  1. The caller cannot answer basic questions or refers you to the original creditor with questions. Collections agencies and law firms are equipped with all of the necessary information in order to collect on your debt and are in regular contact with the original creditor. If the caller cannot provide you with basic information about the debt, such as the date of default, principle amount or interest rate or suggests you contact the original creditor with questions, he or she is likely being dishonest.
  1. You’ve never received written communication stating an attempt to collect on the debt. If this phone call is the first time you’ve ever been contacted about your debt, request a validation letter before speaking with the caller.
  1. The caller contacts you at inappropriate times or after you’ve requested collection attempts to stop. FDCPA regulations state specific times that collectors can contact you. If the calls come before 8:00 a.m., after 9:00 p.m. or while you are at work, do not answer. If you have submitted a written notice requesting no further contact about the alleged debt, communication efforts must be terminated immediately. Continued contact is considered abusive and deceptive under the FDCPA.

If you believe you are the victim of an attempted debt collection scam, contact the original creditor or report suspicious or fraudulent activity to the Federal Trade Commission.

Have you ever been the victim of a debt collection scam? Visit our Contact Us page to share your story.

It’s All About that Pace: Efficient Debt Collection Strategy


In debt collection, as with most things in life, timing is everything.

The longer it takes for your team to act on a case or the longer you give a consumer to pay, the less likely it becomes that you will collect on that debt.

It’s important for you to collect as much on each case as possible for several reasons. Obviously you need to collect to satisfy your clients and show them that your team is skilled and competent, but many clients will send small batches of collections cases in order to assess a firm’s success before sending them more (and often bigger) cases. Your collection fees also pay your employees and keep your business up and running.

Here are a few ways to ensure that your cases are being processed, acted upon and collected on in a timely manner:

  1. Upload and process new cases ASAP. When you receive a new case from a client, upload the necessary information into your database and begin processing the case as soon as possible. Once the information is accessible, other members of your team will be able to do their part, such as making contact with the consumer via a demand letter or filing documents with the court.
  1. Consistently follow up with clients and debtors. This may require hiring additional personnel, but making legal, consistent contact with consumers is the best way to secure payment. Going long periods without making contact with a consumer will reduce the likelihood of receiving payment. Also, keeping your clients updated on their cases is a great way to build relationships and secure more work from them.
  1. Determine if there is intent to pay. If a consumer tells you up front they have no intention of paying their debt or you sense it during your conversations, take advantage of that knowledge and move to legal action in the most expeditious manner allowed.

If you are dealing with a bad debt, or a debt that cannot be recovered, don’t waste time or resources. Focusing on active, collectible cases will provide the most benefit to you and your client.

Successful Debt Collectors: Born or Trained?


Debt collectors operate in a very sensitive environment. Those that make collections calls must know how to talk to people who may be at one of the toughest points of their lives. People who are in significant debt may suffer from related social issues such as unemployment, failed marriage or foreclosure on their home or property as well as mental and emotional repercussions, including depression.

While placing and returning phone calls to consumers, debt collectors must strike a balance between being compassionate about the debtor’s financial situations while also being firm in the execution of their duties to ultimately find ways to collect the debt. Collectors often find themselves on the receiving end of anger, screaming and cursing, during which they must be patient and maintain control of their own emotions.

Because of these conditions, not everyone is cut out to be in the collections business. Collections firms must be intentional and specific when hiring by seeking out those who will make the best collectors.

A recent debate on LinkedIn discussed whether or not personality or proper training techniques were responsible for the success of a debt collector. In his article on Collection Advisor, Dean Kaplan compiled a list of debt collector job descriptions from different firms, and it was no surprise that many of the desired qualities overlapped.

  1. Perseverance/Tenacity
  2. Thick-skinned/Doesn’t take things personally
  3. Cool-headed
  4. Self-motivated/Independent
  5. Patient

Don’t misunderstand us, possessing all of the right qualities does not negate the need for comprehensive training in negotiations, salesmanship, customer service and the firm’s policies. However, without these five attributes, collectors could cause more harm than good for the firm and the consumers.

What do you think? Are successful collectors born or trained? Feel free to weigh in in our comments section.

In the News 02/03/2015


While debt collection law differs greatly from say, criminal defense, there is one component that should be at the center of every firm’s agenda—attorney/client relationships.

Lawrence G. Almelda, a shareholder at Brinks Gilson & Lione in Chicago, outlines four approaches to enhance client service practices for the American Bar Association in the following article:

Creating a personal and mutually beneficial attorney/client relationship has a multitude of benefits, including improving the bottom line. Almelda encourages exercising high responsiveness; making clients’ lives easier by providing a filtered-down version of legal information and summarizing when you can; following up often and—most importantly—making clients look great.

Top 5 Mistakes Debt Collectors Make


A successful collections call takes a lot of training and practice.

There are several rules and guidelines collectors are required to follow. Following those guidelines will still not help them predict the circumstances they’ll encounter while making their collections calls. During the course of their calls they will speak to a variety of individuals, ranging from polite to the disgruntled, and hear an assortment of personal stories of challenging financial situations.

Debt collectors sometimes have a bad reputation with the general public, due in large part to unprofessional, unethical practices. The illegal tactics of debt collectors are one of the many reasons why the Fair Debt Collection Practices Act (FDCPA) is so important. Consumers filed 45,050 complaints in the first six months of 2009 to the Federal Trade Commission (up 19 percent from that same period in 2008), making it even more important that collections professionals use ethical and compassionate practices. Here we’ve listed five of the top mistakes collectors make when contacting debtors.

  1. Not disclosing identity. Collectors are required under the FDCPA to identify themselves, notify the consumer that the communication is from a debt collector, give the name and address of the original creditor, notify the consumer of their right to dispute the debt and provide a verification of the debt.
  1. Failure to cease communication upon request. If a consumer submits a written notice that they wish to receive no further contact about the alleged debt, communication efforts must be terminated immediately. Continuing to contact a consumer is considered “abusive and deceptive” under the FDCPA. Collectors should also cease contact with a consumer who is represented by an attorney.
  1. Failing to Mirandize. The FDCPA requires that debt collection calls include a mini Miranda statement, which lets the debtor know that any communication (written or verbal) is at attempt to collect a debt and any information obtained during the communication will be used for that purpose.
  1. Misrepresentation, deceit or harassment. Pretending to be law enforcement or an attorney, bullying or threatening and using profanities are all prohibited under the FDCPA. While it is not necessarily considered harassment, compassionate collections practices teach collectors to avoid a bad attitude. Losing your temper (even if the debtor yells, curses or threatens the collector), being impatient and getting caught up in a consumer’s personal stories are all ways to derail a collections call.
  1. Revealing information to a third party. Part of a collections call script should be confirmation that you are speaking to the correct person. Identify the consumer by asking for their social security number, address and phone number. Discussing a debt with someone other than a debtor’s attorney or spouse is prohibited.

At Atkins & Ogle Law Offices, LC, we thoroughly train our collectors in collection law, compassionate collection and professionalism. Experience and hard work are a hallmark to our success and make our firm the most time-tested and progressive debt collection law firm in the state of West Virginia. We are guided by our values of service, honesty, integrity and proficiency. While we work to serve our clients with compassion, we also extend those sentiments to debtors.

Best Business Practices, Part V

Last week we talked about skip trace waterfall procedure– how debt collectors find out where debtors live and the best way to contact them.

To recap, waterfall procedures are modeled after a software development concept and are organized by tiers of vendors that provide specific services. This week we continue our waterfall theme by discussing employment and banking waterfalls.


Employment and banking waterfall procedures utilize the same type of vendors as skip tracing but exist to search for a debtor’s place of employment and banking information. This information (often called “hits”) is necessary to move forward on accounts and execute the judgment that has been handed down by the courts, either by garnishing a debtor’s wages or performing a bank freeze.

When building a waterfall, it is important to establish contracts with multiple vendors. The vendor at the top tier of your waterfall will be the net that catches the most, for the lowest price. In other words, negotiating price with your best, most accurate vendor is the best strategy for improving your waterfall’s efficacy. Waterfall specialists must constantly be analyzing the results and effectiveness of the waterfall while continually providing feedback to vendors as to the quality of their work.

Vendors will normally charge a low rate for non-verified hits and a premium rate for verified information. Vendors understand they are competing for your business. Their goal is to be the first to receive each account, thus improving their change for success at giving you the best return on your investment. Once the first transaction (search) is complete, the accounts without any hits begin their way through the trickle-down effect that is the waterfall.

Lastly, because search information comes from data garnered by applications for jobs, credit cards, cell phones, etc., new information could present itself at any time. For this reason, it’s a good practice to resubmit accounts back through the process approximately every six months to ensure information is captured as debtor’s circumstances change.

And then, just as the back of the shampoo bottle instructs, rinse and repeat as necessary!

Drop by next week for Better Business Practices, Part VI on internal auditing procedure.








Right on the Money: What should you be paying your collection attorney?

vector-vintage-money-graphic-c48924First things first – you don’t pay your collection attorney.

The person that owes you does— your customer/debtor.

Unless you are owed an extremely high dollar amount, you will want to be in a commission fee arrangement with your law firm. In other words, your law firm only makes money when it collects on your debt.

For most new attorney-client arrangements a 25 percent contingency fee is standard. So, if the law firm is able to collect $100 on   your behalf, it will keep $25 as its fee and remit $75 to you.

This arrangement could change if you operate a business where your clientele is exclusively other businesses (as opposed to individuals). Then, there is a more sophisticated system that is industry standard, known as the Commercial Law League of America rates. Under these rates the law firm usually receives a lower percentage.

Also, if you have continued to increase the amount of cases you send to the law firm, or if you feel that your contribution to the relationship enables the law firm to aid its bottom line in some way, you are certainly within your right to negotiate your fee arrangement at any time.

Typically, the only time a law firm would request funds from a client would be shortly after initial placement of a new claim. This means that the firm would evaluate the claim, send a required letter to the customer/debtor and advise you of the amount required to litigate the claim, as well as other possible accompanying fees.

These fees are for court costs, not the law firm. It should be clear between you and your law firm that these funds will be returned to you upon the first receipts from your customer/debtor.

Well, there it is, short and sweet. This should help you to understand the basic costs involved in debt collection and assist you in determining the collection route you’re going to take.

5 reasons to use a professional debt collector

Do you ever day-dream that you saved the day fighting bad guys? Performed an emergency surgery and saved a life?

Who hasn’t had a dream like that?

But the truth is, without proper training, we would probably do more harm than good.  Whenever professionals are available to us, we would be wise to hand those situations over to them and spend our time doing whatever it is we do best.

The same is true in business.  Leave the things you are not trained to do well to the professionals and spend your time doing what you do best.

At Atkins & Ogle Law Offices, our specialty is legal debt collection.

If your business extends credit for your goods or services, then you will inevitably have clients (individuals or companies) that will fail to pay you. When this happens you must then decide whether to stop doing the things that you do best and become a debt collector or send it to a professional.

Here are five reasons using a professional debt collector is better than doing your own collecting:

  1. You are paying out either way.

If you have a person in your business that spends a significant portion of their time in collection efforts, you are better off sending these matters to a professional service.  Either way you are spending money— toward commission or toward payroll expenses.  With a payroll expense, your employee spends less time doing the job you hired them to do, and they are working with limited tools and power, which leads us to reason number two.  A debt collection law firm has specific tools at their disposable as well as the legal authority to pursue your money.

  1. Professionals have more tools at their disposal.

There are two general types of professional debt collection services: law firms and collection agencies.   Although this is an over-generalization, it is fair to say that you can expect both will collect your accounts on a commission basis.  While an agency will typically charge you a lesser commission, the law firm will have more tools to get better results. Obviously, each of those factors will depend on the agency and the law firm.

  1. You may end up hiring a lawyer anyway.

While it’s true that if your unpaid accounts have an average balance of $500 or less you are better off working them in-house or sending them to an agency, balances due above certain amounts ($5,000 is common) will ultimately find you in a court, which requires representation by a lawyer.

Most states have a small claims court and a large claims court.  Your business will be permitted to represent itself without an attorney in small claims court.  But the professional collection firm will likely understand the process and system so well that the commission paid the firm will be well worth the price.  Plus, you will usually be able to remain back at your business doing whatever you do best.  Additionally, when higher amounts owed force you into the large claims court, your state will require you to be represented by a licensed attorney.  You will be well served to select an attorney not only well-versed in contract law – but in debt collection.

  1. You can give them a test drive!

Many debt collection law firms will accept claims for one or two days simply for review.  If these claims fail because of conflicts, statute of limitations, document insufficiencies or other issues, the law firms are generally good to return them to you without charge and without your customer ever knowing that the claims were there.  So, when in doubt – send it out!

  1. They’re trained for the challenges.

As an original creditor, you may or may not be subject to the same debt collection laws as an actual debt collector, such as this firm.  However, any person working on your behalf is wise to understand and take note once a customer challenges the validity of your bill.  You are best at that point to consult with trained professionals.


As a debt collection law firm, of course we want to educate you on the reasons to choose us to handle your past due accounts.

However, debt collection law firms require certain legal documents to support your claim in court.  If a customer owes you on a past due account, you will need to prove that showing, at the very least, your original contract with that customer, a written account history showing all charges, credits, interest, fees and adjustments for the life of the account as well any other documents that you feel would help the lawyer show the court what has happened in the that particular case.

If you do not have those types of documents but are still owed on an account, then perhaps working with a collection agency is a better option for you.

Lastly, it’s not uncommon for a customer to avoid or delay payment, nor is it uncommon for customers to fall on hard times, financially. When this type of challenge occurs, only well trained individuals will know the right ways to maneuver through the extensive obstacles that such a challenge may present.

Therefore, while the thought of hiring a firm such as ours may seem like a drastic option, it will allow you to pass along your problems to a trained staff that will properly and professionally represent your interests, while you get back to the interests of turning (and receiving) a profit!