Understanding Midland Credit Management
Midland Credit Management (MCM) is a debt collection agency that purchases delinquent debts from original creditors at a reduced price and attempts to collect the full amount. If you've received a notice from MCM, it's crucial to understand your options and rights before making any payments.
What is Debt Collection?
Debt collection involves pursuing payments of debts owed by individuals or businesses. Companies like MCM buy these debts and try to recover the money. The process can be stressful, but knowing your rights can help you navigate it more effectively.
Verifying the Debt
Before making any payments, it's essential to verify the legitimacy of the debt:
- Request Validation: Under the Fair Debt Collection Practices Act (FDCPA), you have the right to request a debt validation letter within 30 days of their first contact.
- Check Your Records: Compare the information provided by MCM with your own records.
- Review Your Credit Report: Obtain a free copy from AnnualCreditReport.com
Steps to Verify:
- Send a debt validation letter via certified mail
- Request detailed information about the original creditor
- Ask for documentation proving you owe the debt
- Verify the statute of limitations hasn't expired
Understanding Your Rights
You're protected by federal law against:
- Harassment or threats
- Calls at inconvenient times
- False or misleading statements
- Sharing your debt information with others
You can also:
- Request MCM only contact you in writing or through your attorney
- Dispute the debt within 30 days of receiving the validation notice
Payment Options
Lump Sum Settlement
Many collectors, including MCM, are often willing to accept 40-60% of the original debt amount as a settlement.
Payment Plan
- Lower monthly payments
- Potentially higher total amount paid
- More manageable for your budget
Debt Management Program
Consider working with a non-profit credit counseling agency to negotiate terms on your behalf.
Pros and Cons of Paying
Pros
- Avoid legal action
- Improve credit score
- Stop collection attempts
Cons
- May reset statute of limitations
- Potential strain on finances
- Possible tax implications on forgiven debt
Red Flags to Watch For
- Pressure to pay immediately
- Requests for unusual payment methods
- Refusal to provide written verification
- Threatening language or behavior
Documentation is Key
Always:
- Keep copies of all correspondence
- Document all phone conversations
- Save payment receipts
- Get agreements in writing
Final Considerations
Before making any payments to MCM:
- Confirm the debt is yours
- Understand the terms of any agreement
- Get everything in writing
- Consider consulting a consumer protection attorney
For more information on dealing with debt collectors, visit the Consumer Financial Protection Bureau, Federal Trade Commission (FTC), or IRS website for tax implications of debt settlement.