UNIT 26. Creditor Collection Practices

1. Complete the sentences, using the appropriate words from the box:

Incurred; legitimate; attachment; last resort; defendant; harassment; postponement; small claims court; garnishment; voluntarily; unwilling; imprisoned; plaintiff; repossess; unsavoury.

1. Creditors have many ways of collecting money from consumers who are … to pay their debts.

2. In the past, some bill collectors engaged in … practices.

3. False or misleading statements as well as acts of … or abuse are strictly prohibited.

4. The creditor can usually … collateral if the borrower defaults on the loan or obligation.

5. Debtors are also charged for any costs … in the repossession and sale.

6. As a …, creditors may sue debtors in court for the exact amount owed on the debt.

7. Creditors often sue debtors in ….

8. Consumers often have … defenses, such as the fact that the goods were defective.

9. If you cannot appear in court on the date set in the summons, contact the court clerk in advance to arrange for a … of the trial.

10. A default judgment is a judgment entered for the … (creditor) and against the … (debtor).

11. A creditor who wins a court judgment against a consumer may still have trouble collecting if the consumer does not pay ….

12. It was once common practice to have people … for not paying debts; however, this is no longer allowed.

13. … is a court order that forces the debtor’s employer to withhold part of the debtor’s wages and pay it directly to the creditor.

14. … is a court order that forces a bank to pay the creditor out of a consumer’s bank account or that allows the court to seize the consumer’s property and sell it to satisfy the debt.

2. Are the statements true (+) or false (-)? Correct the false statements.

1. The debt collector’s communications are limited to reasonable times and places.

2. False or misleading statements as well as acts of harassment or abuse sometimes take place.

3. Under federal law, you can send bill collectors a notice demanding that all collection contacts cease.

4. Most states permit creditors to repossess even if repossession would involve violence or a breach of the peace.

5. If you are sued the creditor is entitled to collect the disputed amount.

6. If you ever receive a summons to go to court, ignore it.

7. A creditor who wins a court judgment against a consumer have no trouble collecting the money.

8. Persons who are employed by the federal government or who receive other federal money, such as welfare or unemploy­ment compensation, can have their income garnished.

9. Employees who have their wages garnished for a single debt can not be fired.

Achievement Test 3 (Units 19–26)

Find suitable endings to these sentences (sometimes more than one option is possible):

1. Sellers can disclaim:

A – express warranty.

B – implied warranty.

C – warranty of merchantability.

D – no warranty at all.

2. The finance charge is:

A – the money the debtors borrow.

B – the interest charged.

C – the interest charged plus other fees.

D – collateral.

3. Interest rates that can be charged:

A – have no limits.

B – are limited by law.

C – are always variable.

D – are based on financial market indicators.

4.When deciding which credit cards to maintain, you should find out:

A – the annual fee, if any.

B – the annual percentage rate charged on money owed.

C – whether interest is charged from the date of the transaction or only on balances unpaid at the end of the billing period.

D – what are your responsibilities if your credit card is lost or stolen.

5.For protection, any person with credit cards should keep a list of the following information for each card:

A – the name of the company issuing the card.

B – the account number on the card.

C – the number to call if the card is lost or stolen.

D – the balance of the card.

6. EFT cards:

A – are credit cards.

B – are debit cards.

C – look like debit cards but work like credit cards.

D – look like credit cards but work like debit cards.

7. To avoid billing errors you should:

A – check all sales slips carefully.

B – save receipts and cancelled checks.

C – call your creditor regularly.

D – go over each bill or monthly statement carefully.

8. Loan sharking means:

A – high, often illegal rate of interest.

B – the last payment is much larger than the monthly payments.

C – the creditor accelerates the loan, if you miss a payment.

D – combining all your debts into a single one.

9. You may be denied credit if:

A – you are trying to get credit for the first time.

B – you are a poor risk.

C – you are under 18.

D – you have insufficient income.

10. A consumer goes into default if:

A – he is denied credit.

B – he is a bankrupt.

C – he is unable to pay.

D – he is unwilling to pay.

11. The ways of collecting money from consumers who are unwilling or unable to pay are:

A – to make a harassing phone call.

B – to repossess the collateral.

C – to sue debtors in court.

D – to get a court order that forces the debtor’s employer to withhold part of the debtor’s wages and pay it directly to the creditor.