How to deal with debt collectors
Do you have any unpaid bill that you’ve completely forgotten of? Have they come to collect it? Don’t burst into panic. You can solve this problem if you approach it reasonably.
According to the Fair Debt Collection Practices Act, you have quite a number of rights when you have to do with debt collectors. In this article we provide six basic things that you should know if a third-party debt collector gets in touch with you.
Get all the necessary information in writing.
You have a right to get a written notice containing the name of your creditor and the sum of money that you owe within five days since a collector contacted you. This letter must also contain the information about what actions you should perform if you are sure that you don’t have any debt, according to the debt collection act.
So, before you start interacting with a debt collector, make sure that you have all the information you need in the form of a letter.
If you are sure that you don’t owe anything, dispute it in the written form.
If within 30 days of receiving a letter you send a response to the collection agency, claiming that you don’t have any debts, it would be impossible for them to contact you. Gerri Detweiler, the Sarasota, Fla.-based co-author of "Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights", says that you should always make sure that you have a copy of all the correspondence with the collection agency concerning your debts.
Later on, all your responses to the agency must be sent by a certified mail. Jeffrey Suher, a consumer attorney in Pittsburgh, whose specialization is debt collection, claims that "You must send certified. Otherwise, they'll deny receiving it."
Don’t forget that the Fair Debt Collection Practices Act gives the collector certain rights as well. A collection agency can resume its activity if it manages to provide you with necessary proofs. It can be a copy of the bill that you haven’t paid, for example.
Keep records of all the calls and messages received.
You should have copies of every single letter you’ve exchanged with the collector and records of all the phone calls.
Write down the date and time of the call, the full name of the agency and of course the sum of money that you owe according to them.
Detweiler explains the necessity of all this red tape as follows: "That paper trail could be essential if it turns out the debt collector breaks the law”.
If there is any voice mail from the agency, save it too.
Remember that all the collectors have a lot of restrictions.
As far as collection calls are concerned, there are a lot of things a collector cannot say or do under any circumstances. The list includes:
- Using obscene words in relation to you.
- Disturbing you with numerous calls at short time intervals.
- Calling before 8 a.m. or after 9 p.m. without your permission.
- Calling you when you are at work even after you have asked them not to.
- Telling anyone except you and your attorney about your debt.
- Misinforming you about the sum of your debt.
- Falsely claiming to be law enforcement officials.
- Falsely claiming to represent some credit bureau.
- Threatening to sue you when they are not in fact going to do that.
- Threatening to fine you or seize some of your property unless they mean to do it.
Don’t say much and be firm.
You’ll probably ask what you should say if a debt collector calls. Well, the answer is simple: Give as little information as possible.
John Ulzheimer, president of consumer education for San Francisco-based Credit.com. explains: "They’re interviewing you. They're interrogating you. They're trying to determine if you have the capacity to pay. Say as little as possible."
Try to stay firm and calm; don’t pay much attention to what they say. Your task is now to stick to the facts, repeating the same things as many times as you can. Don’t give way to emotions.
It’s alright if you try to negotiate.
The fact is that debt collectors are often glad to get whatever payments they can. So, you have a good chance to get rid of them paying less than the full sum you owe.
Ulzheimer gives the following tip concerning this trick:"Start right out of the gate offering 10 percent to 15 percent of what they say you owe. Then, probably settle somewhere in the neighborhood of 30 percent to 50 percent."
If you decided to pay, make sure that you have all the details of the deal in the written form. Only when you have a confirmation of the agreement, you can send money. You should pay with a cashier’s check rather than a personal one.
Remember that under no circumstances should you give debt collecting agency an access to your personal bank account.
There’s also another effective strategy that you may resort to. It is called a payment-for-deletion deal. You give your agreement to pay the whole sum, but the agency agrees to remove the collection account from your credit report in return. You don’t have to do anything. The collector will get in touch with the credit bureau and your debt will be removed.
According to the information provided by Federal Trade Commission and the Boston-based National Consumer Law Center, this is not an illegal practice. But despite this fact, it is strongly disapproved of by credit reporting agencies. So, many debt collectors may decline this proposal.
Detweiler adds: "If you're lucky enough to get a debt collector to agree to a pay-for-deletion (deal), get it in writing in advance".
This strategy is perfect for dealing with bills that were lost but are now in collection. If your collection account is removed, it will considerably increase your credit rating.