Stages Of The Collection Process

The effectiveness of our legal representation depends, in part, on the stage of the collection process in which you are found. The life of a collection account can be broken down as follows:

A “default,” also referred to as a “breach,” usually means that there has been some non-performance of a contractual obligation. The majority of defaults result from the failure to make payment, although many other events constituting a “default” are described in credit agreements, notes and other financial instruments. At this early stage, most creditors or lenders are willing to modify the contract to allow additional time for re-payment, to defer payments, or to make other accommodations whereby the default can be cured. At this stage, the account usually remains open. However, “slow” or late payments may still be reflected on your credit report, having an adverse impact on your score. Unless there is a valid dispute as to whether an event of default has actually occurred, Carlisle Law Firm does not provide legal services to debtors at this stage of collection.


Debtors are often confused as to the meaning of the term “charge off” and its impact on the relationship between the debtor and creditor. A “charge off” occurs when the creditor stops treating the money owed on the account as a “receivable,” or asset, and begins to treat the money owed as a loss for accounting purposes. The time period within which a charge off must occur in the context of credit card accounts is regulated by federal law. Where no payments are received within 180 days after default, the credit card issuer is required to “charge off” the account. Other creditors may or may not record an actual charge off date in the transaction history for the account.

Once a creditor has charged off or closed an account, the next step is usually to “accelerate” the debt. “Acceleration” occurs as the direct result of the debtor’s failure or refusal to abide by the terms of the parties’ agreement. Acceleration is a demand for re-payment of the entire debt obligation at once. The date on which these events occur are important, as they mark the beginning of other relevant time periods and deadlines in the collection process. The date of the first delinquent payment and date of charge off must be accurately reported by credit bureaus, and within certain time periods. The initial demand for an accelerated debt, if made by a collection agent, is subject to notice provisions and deadlines found in the Fair Debt Collection Practices Act [FDCPA] at 15 USC 1692c, 15 USC 1692e(11) and 15 USC 1692g.

It is not until this stage of the process is reached, that our firm would first offer to provide legal services. An experienced attorney who feels no moral obligation to the creditor, but understands the collection industry and the difficulties faced by both parties during the collection process, makes an incredibly valuable ally in your efforts to resolve unpaid debt.

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