Debt collection calls are never fun, not even in the best case scenario. It can be a real headache knowing that you have outstanding debt that can’t be paid and nowhere to turn because the debt collectors are only offering the bare minimum in terms of options. Most debt collectors believe that use of abusive language, threats and scare tactics will frighten you into paying them. Not only does this breed unnecessary tension, but it can make the situation become (or at least feel) a lot more dire. Knowledge is a superpower when it comes to dealing with a debt collector in any shape or form.
Here are 7 things To Know When Dealing With a Debt Collector
1. Familiarize yourself with the Fair Credit Reporting Act. Google it if necessary and print out. You have rights. Yes, a debt collector has every right to collect on a debt you legitimately owe, but there are rules and restrictions – formally known as the Fair Debt Collection Practices Act (FDCPA) – that govern how they can go about their business.
2. Under any circumstances to you have to tolerate abusive behavior. It’s not legal. The Fair Debt Collection Practices Act prohibits this kind of conduct. The Fair Debt Collection Practices Act (FDCPA) was created for the sole purpose of protecting consumers from debt collector harassment by prohibiting certain debt collector behavior. If a debt collector exhibits such behavior, be sure to document the behavior. Keep a log of all harassment. Your next move is to file a complaint with the Federal Trade Commission. You may request forms from the Federal Trade Commission, or you can write a letter yourself. Send it to 6th and Pennsylvania Ave. NW, Washington, DC 20580, or visit them online at www.ftc.gov/ftc/complaint.htm. Be sure to include in your complaint the collection agency’s name and address, the name of the original creditor, the dates and times of all communications, the names of any witnesses, and copies of any other material (written communications, tapes of conversations, your debt collector harassment log, etc.)
2. Negotiate a Settlement On Your Terms, Not Theirs – Go over your income and expenses with a fine-tooth comb, figure out what you can afford, and only agree to pay a realistic amount. Payment plans are not always necessary and usually by the time your debt reaches third-party collectors, it’s at last end before being written off. If you agree to a payment plan, you will likely pay more over time. Avoid this if you can. If you do agree to a payment plan, make sure you fully understand the total amount you will pay.
3. Zombie Debts Still Exist – A Zombie debt is an old debt that just won’t die. To piggyback off of Number 2, Collection accounts get resold all the time, and it’s not uncommon for someone to get a call about a debt that’s outside the statue of limitations or no longer owed. The latter is illegal, but the former may not be: The statue of limitations applies to how long a collector has to sue you over a debt, but, in many cases, they can still try to get you to pay. Do not pay it right away. Get the collector to validate the debt before even acknowledging that it exists. People unknowingly restart the clock on old debts by paying part or even agreeing over the phone that it’s yours. The key to defend yourself against Zombie Debts is to do your due diligence. Look at your credit reports to see if the debt is latched on. Dispute the debt, with the credit bureaus. Get all details necessary to fight it. That’s how you get it off your credit report.
4. Beware of Scammers – Always get the debt collector to identify themselves with their name, company, street address, telephone number and if your state licenses debt collectors, a professional license number,” according to the Consumer Financial Protection Bureau (CFPB), which has more tips for spotting a debt-collection scam on its website. By law, you are entitled to verification. And, remember, legitimate debt collectors should not claim that they’ll have you arrested.
5. Do Not Fall For The “Just Pay Something” Trap – Once you pay anything, especially giving payment over the phone. You are back to restarting the clock as debt gets bumped right up on your credit report based on how less or more often you pay. Always ask the collector to send you something in writing. Debt collectors must investigate a debt so long as you file a dispute in writing within 30 days of their initial contact – and they’re to cease contact until they verify (again in writing) that you owe the amount in question.
6. Too Many Calls Are Illegal – Another facet of FDCPA: Collectors can’t call you too early in the morning (before 8 a.m.), too late at night (after 9 p.m.), too many times a day or at work once you tell them not to. They’re also not allowed to use abusive language – no cuss words or name-calling. You can also ask them to stop calling. It is your right! Per FDCPA, a collector must cease contact if you send a letter requesting they do so. Keep a copy of your letter for your files. You can also send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. That letter won’t absolve you of the actual legitimate debt, but it can curb incessant and nonstop heated phones calls.
7. Collectors Can’t Just Inflate What You Owe – Regarding the amount: owed A debt collector can charge interest, but only up to the amount stipulated in your contract with the original creditor or what is permitted by law. Most states also cap the amount of interest and fees a debt collector can charge.
Debt is something nobody likes to have but you don’t have to become prisoner to the warden that are debt collection calls. You have rights. Exercising your rights helps you to take better control of your situation. Want to know more ways to effectively handle debt collectors? You can see the full list of 50 things anyone dealing with a debt collector should know on Credit.com.