Tips For Handling Debt Collectors
Having more debt than you can handle is bad enough on its own. It is even worse when that debt brings on never-ending collection calls from debt collectors. Most consumers cringe at the thought of debt collectors asking them about their unpaid medical bills, credit cards and past due student loans.
According to debt collectors, consumer credit counselors and state regulators, ignoring debt collectors who call you and send you letters is not the best idea. It is best to deal with the issue head-on, even when you do not have the money to pay your bills quite yet. Sweeping your debt issues under the rug will make things worse in the long run.
The best way to approach debt problems is to avoid getting involved with collectors in the first place. If you see yourself heading down the path of not being able to pay your bills, speak with your creditors before the problems escalate. Many creditors will work with their consumers to negotiate the debts owed and work out reasonable payment arrangements.
This option is much better than letting your bad debts get sold to one of the many third-party debt collectors. However, if your debts have already been sold to collectors, below are some of the top tips for dealing with them.
Tips For Dealing With Your Debt Collectors
1. Know Your Rights
When it comes to dealing with debt collectors, it is important to know your rights as a consumer. If you are not up-to-date with what rights you have, the FTC has many publications that are designed to fully educate people about their rights under the Debt Collection Act. Nuisance and harassing phone calls, abusive language and threatening voicemails are not allowed from debt collectors. If one of your debt collection agencies is harassing you, you can submit a complaint to your attorney general.
2. Face Your Problems
When it comes to debt, it is best to take your head out of the sand. Do not make a habit of ignoring phone calls and letters regarding your debt. Any debt lawsuits or court notices you are involved in needs to be taking care of. If you are contacted by a debt collector, you may first decide to send a written request to them asking for the debt to be verified. This needs to be done within 30 days.
It is important to try and solve debt issues before the collectors place negative information on your credit report. Negative information can remain on your credit report for up to seven years. This can affect your ability to apply for credit cards, personal loans and mortgages. It can also cause you to be charged higher interest rates for insurance. Communicating with your debt collectors allows the process to be more consumer-friendly.
3. Hire A Consumer Lawyer
If you get served notice of a debt lawsuit filed against you, consider hiring a consumer lawyer to represent you in court. These lawsuits need to be taken seriously because consumers who lose in court may end up having their wages garnished. Many collectors end up losing based on the fact they have little proof of your original debt owed.
Depending on the state you live in, your debt may have already expired under the statute of limitations. If you do not show up to your court date, the debtor may win by default. Your best chance of having a lawsuit dismissed in a court of law is greater when you show up and have legal representation.
4. Keep All Correspondence
There is not a single rule on how long you should keep documentation regarding your debts. Some experts recommend keeping all documentation as long as you normally would your tax documents. Others believe you should keep your paperwork until the statute of limitations expires. Others, however, believe you should keep your paperwork forever.
5. Protect Your Bank Accounts
If you have a suit filed against you for non-payment of a debt, you may end up getting your checking and savings accounts frozen. This can cause many problems for people who have mortgages and other bills to pay. As soon as possible, let your debt collectors know if your bank account and savings accounts contain only exempt funds. Additionally, it is important to let your collectors know if you have filed for bankruptcy.
6. Don’t Make Debt Collection Easier On Them
Experts agree it is never a good idea to give debt collectors your bank account information for automatic withdrawals. It is best to make debt payments using money orders or another third-party payment service. This will allow you to have proof of payment without having to use a personal check.
7. Record Conversations
When at all possible, record your conversations with debt collectors. If they are threatening you or using abusive language, the recorded conversation can be very helpful when filing a complaint against them. In some states, it is required that you tell the debt collector you are recording the conversation. Warning them in advance they are being recorded means it is less likely they will overstep their bounds.
8. Get Terms In Writing
Before you make any payments on your debt according to an agreement you made with a debt collection agency, get the agreement in writing and make sure it is signed by a debt collector representative. Having the payment arrangement in writing will help to avoid any misunderstandings about the time period or amounts to be paid.
9. Send Mail Certified
It is a known fact that letters can get lost in the mail. Many experts recommend sending any and all correspondence to your debt collectors using certified mail options. Obtain a return receipt as proof your letter was received by the debt collector.
10. Debt Management Help
If you need help working with your creditors and any debt collectors, find an accredited counseling agency to help with your debt management. They will help you work out a payment plan to pay off your debts that will work with your family budget. The FTC does warn consumers to steer clear of for-profit debt management companies, however.