Sherman, Texas – An East Texas man is suing a debt collection agency after one of its workers contacted and harassed his friends and family.  Jimmy Cotten filed suit against Nelson, Hirsch & Associates Inc. on December 15^th, 2010 on the grounds that one of its agents contacted his cell phone several times a day, contacted his cousin and called his friends on more than one occasion in an attempt to collect a debt.  Cotten is arguing that these collection practices were harassing and abusive in nature, which is a direct violation of the Fair Debt Collection Practices Act and Texas Debt Collection Act.

Cotten is also claiming that these harassing collection tactics have caused him to suffer from humiliation, anger, anxiety, emotional distress, fear, frustration and embarrassment.  The collection agency is also being accused of invasion of privacy by intrusion into private affairs and intentional infliction of emotional distress.  The plaintiff is seeking an award of actual damages, statutory damages of $1,000 for each violation, costs of litigation, attorney’s fees, injunctive relief and punitive damages.

While this lawsuit may seem frivolous, Cotten may have a real case as he moves forward.  The Fair Debt Collection Practices Act was put in place for such circumstances.  The act is designed to protect consumers from unjust debt collection practices by collection agencies.  Since one of the tactics collection agencies used to use quite effectively to collect unpaid debts was humiliation, the Fair Debt Collection Practices Act was put in place so that these debt collectors could no longer perform these practices.  Under this act debt collectors must follow a strict set of guidelines when trying to collect on a debt or risk the chance of being sued just like Jimmy Cotten is doing to Nelson, Hirsch & Associates Inc.

Debt consolidation is when someone takes out a large loan designed to pay off several outstanding debts.  This new loan payment typically will result in a lower monthly payment than what the person was previously paying for all of the other debts.  Debt consolidation is a great way to rid oneself of several high interest debts such as credit card bills by combining all of those payments into one loan.  A debt consolidation loan will lump all of your debts together but lengthen the amount of time you have to repay the loans.  This is how you are awarded a lower monthly payment.

For someone who has a lot of various debts a debt consolidation loan surely sounds like a good idea.  Having the chance at lower monthly payments will sound like a real treat to most people who are in debt.  While debt consolidations usually do help people dig themselves out of debt sometimes they may not be a good idea.  When considering a debt consolidation loan it is important to realize that there may be other fees associated with the debt consolidation services.  These fees may actually make it more expensive to pay off all of your current debts with one lump sum.  It is vital that you make sure to read all of the fine print and figure out the total amount you will be paying over the length of the loan to ensure that you will actually be saving money.

Another important thing to remember when considering a debt consolidation service is to make sure that you can actually afford to pay back the entire principal of the loan in the time specified.  Debt consolidation loans are known as secured loans meaning that you will have to put up some form of collateral in order to receive the loan.  Usually this collateral is in the form of your car or house.  If you are unable to repay the loan within the terms specified then you will risk losing whatever it is you put up as collateral.  Always make sure to read the fine print and know what you are agreeing to when signing up for debt consolidation.

When people are in debt they will look for any way to help get them out of it.  Debt consolidation can be a great way to reduce the amount of debt that you owe and lower your monthly payments in the process.  By combining all of your outstanding debts into one monthly payment spread out over a longer period of time debt consolidation loans can result in significantly lower monthly payments.  However, as is the case with any loan debt consolidation does not come without any risks.  The biggest risk is taking several unsecured loans and turning them into one secured loan where you will need to put your car or home up as collateral.  If you are unable to make the payments on your debt consolidation loan you risk losing your house or car which was not the case before when the loans were unsecured.