It can be a scary experience when debt collectors start calling you on the phone. They will start calling you at home, at work, and of course at the worst possible time. They are also not the nicest people on the phone most of the times and tend to try and bend the rules when asking you for the money you supposedly owe. You have to remember that many of these debt collection companies have bought your old debt for pennies on the dollar and have very little to lose with badgering you for any amount of money that you will give them. The federal government has tried to help protect consumers with new laws to end the aggressive and excessive harassment, but debtors still can find themselves hounded by a debt collector.
Here are four things to remember when dealing with a debt collector…
1. Never Give Access To Your Bank Account. Never give a debt collector direct access to your bank account. Never give them permission to draft money from your account. They will take more than you agreed upon, and you will have a nightmare of a time trying to get them to stop taking or give any back. Always write debt collectors a check for the exact amount agreed upon, and date the check that very same day. Do not predate or postdate the check.
2. Always Get Concessions In Writing. More and more banks are selling their bad debt for pennies on the dollar to collection agencies. The practice is skyrocketing as banks race to write off their old debts and clean their own balance sheets. Debt collectors therefore have a very wide margin to negotiate with you when trying to collect the money that you allegedly owe. So, you can often time ask to pay a one-time lump sum payment for about 40% to 70% of the balance that you owe. Ask a debt collector how much they will accept as payment in full. Make sure that you agree that it is actually payment in full and write that on the check when you mail it in to them.
3. Don’t Fall For A Threat. There is no such thing as debtor’s prison anymore in America. You cannot go to jail for not paying a bill. While I am not condoning not paying a debt that you rightfully owe, but refusing to pay a debt is not a criminal act. It is a civil matter, and the worst thing that can technically happen to you is that you will get taken to court and sued instead of taken to jail.
4. Make Them Send You A Letter. Under the Fair Debt Collection Protection Act, the collection agency that contacts you is required to send you a letter within five days. The letter is required to include contact information about the collection agency, tell you how much you supposedly owe, the exact name of the creditor, and what to do if you think you do not owe the debt. Make sure that you wait to receive that letter to ensure that you are dealing with a legitimate collection agency.
Debt collectors are often ruthless. Be careful when dealing with them, but you should also understand the current laws that are in place to protect you. You should not put up with any threatening behavior from a debt collector. Know your rights and protect yourself and what little money you may have left.
(photo credit: Alan Cleaver)