SALT LAKE CITY — Jessie Paige had spent her life being financially responsible, paying her bills on time and staying out of major debt.

The 28-year-old even worked her way to homeownership in late 2010 and was “living the dream.” Then a nightmare twist of fate put her finances — and consequently her life — in a tailspin that she is still struggling to get out of.

Paige had her identity stolen about a month after she closed on her first home near downtown in October 2010.

“I have several credit cards in my name, and I still can’t get them off,” she said of credit cards created that she had no knowlege of. “I’ve been fighting them and fighting them … and I’m at the point that I’m filing bankruptcy just to get rid of the credit cards and accounts that were (illegally) opened in my name.”

The ID thief even opened an account at the Salt Lake City Library in Paige's name, using a phony address, and checked out $600 in books that were never returned.

Prior to the ID breach, Paige said her credit score was in the mid-700s. It dropped to the low 500s.

As the situation began to unfold, Paige said she would receive menacing calls from aggressive debt collectors demanding that she pay bills that were mounting.

“I would get three or four calls a day,” she said. “They would also call my work.”

Despite ongoing dialogue and submission of documentation explaining the situation, the calls kept coming, she said. To make matters worse, she was laid off from her job, making an already challenging situation virtually intolerable.

Frustrated and overwhelmed, Paige eventually contacted a local credit counselor who was able to help her tackle the problem and stop the harassing calls.

While Paige’s experience became extreme, managing money can be a challenge and there are ways to deal with debt collection without it becoming an overwhelming experience. In most circumstances, debt problems that are properly managed can be resolved without acrimony.

Will VanderToolen, director of counseling at at AAA Fair Credit Foundation, a nonprofit credit counseling agency in Salt Lake City, said among the first steps consumers should take when confronting debt collectors is to figure out the source of the debt, then contact the original creditor to determine if it is a legitimate claim.

“If it’s valid, step two is to determine what type of payment arrangement or agreement you can come to,” VanderToolen explained.

The reason consumers wind up in debt are varied, he said. Some are poor money managers, while others have experienced personal issues such as losing a job or having unexpected medical expenses that arise, putting them in financial dire straits.

“In some cases, these households have gone through some pretty drastic changes in income and have had an inability to meet their financial obligations,” VanderToolen said. “It’s not uncommon to have someone with many collection agencies calling all at once.”

While most debt collectors are professional and reasonable, he said, some can be aggressive and pose a problem with uncompromising tactics.

Fortunately, there are rules they must abide by, VanderToolen said. The Federal Trade Commission’s Fair Debt Collection Practices Act protects consumers.

“If an individual faces a situation in which they are receiving communications from a debt collector, they should become familiar with (the act),” he said.

Once a debt is sent to collections, consumers should immediately address the matter rather than procrastinate or ignore it, VanderToolen said.

“Contact your creditors and let them know what’s going on,” he said. “Be proactive. Tell them about your financial situation, and ask for them to defer payment for a couple of months until you can get back on your feet, or ask for a reduced payment plan.”

While he acknowledged that not all creditors would agree to such requests, if some are willing to work with the consumer, it will help that person in the long run as they try to repay their obligations, VanderToolen said.

Among the more common expenses that eventually land in collections are medical bills. With the added complication of insurance carriers that are tasked with paying all or portions of medical expenses and complex billing coding that is input manually, there are many opportunities for consumers to be billed incorrectly, according to Robert Parker, chief executive officer of Emergency Physicians Integrated Care in Salt Lake City.

Parker said about 15 percent to 25 percent of his firm's yearly patient billing winds up in collections, and sometimes the consumer is unaware they had an outstanding balance until they get notification from the collector or through a negative credit rating.

In those cases, a review is conducted to determine what, if anything, is owed.

“Going to a collection agency really is a last resort,” Parker said.

However, there are cases when it is necessary, he added.

“Our intent is to reach the party and give them the information about the debt, and inform them about action that could take place — like a credit bureau report,“ said Marquelle Bogh, president of Mountain Land Collections in American Fork and spokeswoman for the Utah Association of Collectors — a trade organization for third-party collectors.

Collection agencies also want to give people "an opportunity to take care of the account before (the worst case scenario) takes place,” Bogh said.

Most often, consumers are willing to pay the debt when they become aware of it, she said.

“In Utah, we have a higher-than-average amount of people who have a true desire to pay their bills,” Bogh said.

The American Collector’s Association estimates the average commission range for third-party collectors is between 10 percent and 20 percent, depending on age of accounts, nature of account, account balance, etc. The overall recovery percentage would be about the same, also depending on the type of account, age when it was turned over, and other mitigating factors.

The total amount recovered annually by the 25 members of the Utah Association of Collectors is approximately $381 million, Bogh said, though the total collected statewide through all third-party collectors would be much greater.

As suggested by AAA Fair Credit Foundation, Bogh said consumers should communicate with any collector in order to resolve the issue in the most expedient fashion.

“Make sure your intentions are made clear,” she said. Most people are cooperative once they have an understanding of the debt situation, “especially if they are treated in a professional manner,” Bogh added.

“If we treat people with fairness and professionalism, for the most part, they will be receptive to what we have to say,” she said.

Meanwhile, Paige is still dealing with the fallout from her ID theft disaster. Since the problem first surfaced more than two years ago, she has been unable to get the situation resolved.

With bankruptcy looming, her inability to find work and the potential loss of her house, she has decided to move back to her native Missouri to look for a fresh start.

Having learned some very hard lessons from this experience, Paige warns other consumers faced with collection calls to learn their rights.

“Know what (debt collectors) can and can’t do,” she said. “When they don’t follow the rules, contact (the authorities) to let them know that your rights are being violated. And keep good records of every call so that you can fight back.”

For information on the Federal Trade Commission’s Fair Debt Collection Practices Act, visit www.ftc.gov/os/statutes/fdcpa/fdcpact.shtm.

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