It’s no secret that the debt collection agencies are full of controversy and headaches for consumers struggling with debt. According to a new report released by the Association of Credit and Collection Professionals (ACA), debt collection agencies recovered $55 billion in debt owed to creditors during 2010. The good news is that there are laws to protect those being sought after by this usually ruthless industry.
Knowing how to protect yourself and what the collection agencies limitations are can keep you from losing your cool and maybe even put you in a position to pay back your debt in a way that works for you, your family and your budget.
7 Tips for Dealing with Collection Agencies
- Don’t ignore the issue. If you receive correspondence from a collection agency, respond as soon as you are able. By ignoring the debt or correspondence from the collection agency you may be imposed with additional fees, possible court proceedings and damage to your credit report. Make it clear you acknowledge the debt and would like to work something out.
- Get it in writing. Without a paper trail it turns into a battle of he said she said. Be sure to include a record of all conversations, agreements and payments. Send communications via certified mail, return receipt requested; this provides proof you sent the document and proof that the collection agency received it.
- Log the calls. Keep a record of the day, time, and name of the collection agent, collection agency and a brief overview of the call.
- Don’t fly off the handle. It can be difficult to have a calm conversation when either party is being combative. Keep your cool, speak calmly, and if things are getting out of hand politely let them know you will follow up with a letter
- If you don’t think you owe it, dispute it. No one should have to pay for a debt they don’t owe. Request, in writing that the collection agency provide proof of the debt they are trying to collect..
- Only agree to pay what you can afford. Do not agree to pay what they are offering if you know you won’t be able to make the payments. Instead come to an agreement you know you can commit too.
- Getting sued. In the event a collection agency takes you to court over the debt be sure to respond to the court either personally or through an attorney. Bring all documentation including your notes with you. If you do not respond to the court notice the collection agency can obtain a default judgment against you. This judgment can allow them to garnish wages and freeze bank accounts.
For a full review of all of your rights when it comes to dealing with debt collectors you can visit the Federal Trade Commission’s website.
Debt collectors are generally seasoned professionals and they may try a variety of tactics to get you to pay. Don’t be intimidated into agreeing to payment arrangements that you can’t afford. If you can’t afford to pay your debt, seek your own professional debt help. The laws are there to protect you and there are multiple options available to help resolve your debt.
What is the stickiest situation a debt collector put you in?
Suzanne is a certified credit counselor and a Social Media Specialist for CareOne Debt Relief Services. Suzanne writes for Divorce, Debt and Finances and A Straight Talk on Debt. Follow Suzanne on Twitter @SuzanneCramer1 and @AskCareOne where she shares her insights on divorce and managing your finances.
How should someone deal with a debt that is past the staure of limitations? Can You settle you debt for less than is owed on it? What about comsumer credit deals? I heaed debt settlement companies are a rip-off??/
MrFrugalrank recently posted…Save On Gas
Hi @MrFrugalFrank Some states do have a Statute of Limitations on debt collection. It is important to know and understand your consumer rights. Here is an article: “Federal Trade Commission-Know Your Rights as a Consumer” http://c1c.bz/acx
You can review for more information.
As far as settling your debts for less it is possible but can be difficult to navigate on your own. By working with a debt relief provider you have access to someone that knows the law in your state. Yes there are many settlement companies that are a ripoff and it is really important to do your homework before deciding to use a debt relief provider and choosing one. Here is a link to some of the questions you should ask: http://c1c.bz/2oy
I hope this helps 🙂
Suzanne
I couldn’t agree more about logging the phone calls. This applies to other important phone calls like car insurance and other things as well.
20’s Finances recently posted…Financial Carnival for Young Adults – 4th Edition
@20’s Finances I am list person as well. When talking to creditors, or even your cell phone company it is important to document the call. There have been many times I have had an issue go unresolved and needed to call back and make a fuss. I was happy to have the date, time, and representative along with details of the call in front of me 🙂
I’ve been fortunate in that none of my delinquent accounts ever got so late they went to collections, but I have had to help a partner out before. Staying calm, and getting a payment plan in writing helped so much – we got them to agree to a plan we could afford, and eventually we were able to kill that old toxic debt.
Getting calls for collections sucks, especially if they aren’t your debt (we’ve had that happen too), but if you can say calm and negotiate, you can get it solved.
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@Kris I am glad to hear none of your accounts went to collections 🙂 And, you did all the right things when it came to your partners debt. Avoiding it is certainly not the way to go and remaining calm is better than going off on a collector. In doing so you should be able to negotiate with them like you did and devise a repayment plan; in writing of course.
i have friends who are afraid to even answer their phone, because of harassment from debt collectors.. but i try to tell them that you can’t hide forever.
eventually you are going to have to deal with them, or the problems will only get worse. i will show this list to them.. 🙂
@Jefferson Yes I work with people everyday who fear talking to collectors and don’t know how to handle situations like this. This post is a pretty comprehensive list for dealing with collectors and should help–thanks for aharing 🙂
I luckily, haven’t had to deal with debt collectors, but they sound terrible. When I listen to the Dave Ramsey show it always seems he has at least once caller who’s being abused by debt collectors. No fun!
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