If you are one of the millions of people who have fallen behind on payments to debtors, chances are you will eventually have to deal with debt collectors.
How to Handle Debt Collectors Effectively
Despite laws designed to protect consumers from harassment by debt collectors—such as phone calls and contact at places of work—many debt collectors can still be intimidating and excessively forceful. Fortunately, there are a few tips and strategies that can help you manage these interactions effectively, so you can work toward the best possible outcome for both yourself and the organization you owe money to.
The first piece of advice is that, no matter how badly you want to avoid answering your phone, do not ignore debt collectors. Ignoring their calls will only lead to more aggressive attempts to contact you. The best approach is to answer the phone and listen to what they have to say. Keep in mind that many debt collectors today are required to record phone conversations to ensure they comply with the law. If this is the case, they must inform you of this at the start of the call.
Key Steps to Take When Dealing with Debt Collectors
The next step is to listen carefully. Have a pen and paper handy to write down everything they say. Make sure to get your file number and gather all the information you need to address the debt effectively. You should also ask to receive all information in writing. Often, depending on where you are in the debt collection process, many collection agencies will add hundreds of dollars in processing fees to your original debt. These fees are regulated by law and can often be disputed.
Once you are contacted by a debt collector, they have five days to send you a written explanation of the debt. At that point, you have 30 days to file any necessary dispute with the collection agency. If you want to refuse the debt or believe the amount is incorrect, you have 30 days to file a dispute.
Any attorney will advise you that communication with debt collectors should be handled via certified mail. Remember, the people on the other end of the phone typically earn a commission based on what they can collect and how quickly they collect it. As a result, they will often be pushy, and sometimes they stretch the truth. Just because someone tells you that you will be credited money or that you can extend your repayment date doesn’t mean it’s true unless it’s in writing. Always send your information via certified mail with return receipt requested.
Another important tip is to be honest about your financial situation. Do not tell the debt collectors that you can make a payment when you know you cannot. Debt collectors have many options available for people who are struggling financially. They will likely start with the most beneficial option for them, but if you cannot meet the arrangement, it’s best to be forthright. Otherwise, the cycle of phone calls will only continue.
Keep Detailed Records of All Communication
Another critical aspect of dealing with debt collectors is to keep copies of phone records, the names of the people you speak with, and all the information they send you. Take note of the names and phone numbers of everyone you talk to. If the collection agency is a call center, you may speak to many different representatives throughout the process. Keep all correspondence and ensure your paper trail is thorough. Also, if they inform you that a call will be recorded, remember that you have the right to request that recording at a later date.
The Fair Debt Collection Practices Act, passed to protect consumers, also outlines restrictions on what debt collectors can do. For example, collection agencies cannot:
- Use abusive or obscene language.
- Harass you with repeated calls.
- Call before 8 a.m. or after 9 p.m. unless you agree.
- Call you at work if you have asked them to stop.
- Talk to anyone but you or your attorney about the debt.
- Misrepresent the amount of your debt.
- Falsely claim to be an attorney or law enforcement official.
- Falsely claim to represent a credit bureau.
- Threaten to sue unless they actually plan to take legal action.
- Threaten to garnish wages or seize property unless they actually intend to do so.
Despite these laws, collection agencies will still use these tactics to try to bully you into repaying the debt or locking you into an unfavorable arrangement.
Protect Yourself and Stay Firm
One of the most important things to remember when dealing with debt collectors is to say as little as possible. They are essentially interrogating you. Before agreeing to anything, ensure they are willing to provide all the details in writing. If they pressure you to make a decision immediately without allowing you to discuss it with others, stand firm. Take a moment to gather your facts and make sure they are working in your best interest.
