Watch video: How to deal with debt collectors and get assistance
How to tackle debt collectorsby Michael Bovee
What are the 3 types of debt collectors?
- Assignee – Accounts are assigned to them
- Debt buyers – Accounts are purchased by them
- Collection attorneys – Accounts are placed with law firms
What are the 3 ways to handle collectors?
- Get in touch with a professional
- Discuss your problem in forums
- Know the FDCPA laws
How can you negotiate with collectors?
Who are debt collectors and what can they do?
Debt collectors collect past-due or unpaid bills from consumers. They are of 3 types – (a) assignee (b) debt buyers (c) collection attorneys. Accounts are often assigned to collectors by the creditors when they are unable to get back money in spite of their best efforts. They get commissions on the basis of the collected amount. Sometimes, collectors buy accounts for pennies on the dollar. On the other hand, creditors sometimes assign accounts to law firms who can sue consumers for fast debt recovery.
What can the debt collectors do?
Here's what collectors can do to collect money from consumers:
- They can call you for collecting money
- They can call your relatives for getting your contact details
- They can sue you and garnish your wages
- They can seize your property after getting judgment order from court
- They can report your accounts to your credit report
- They can sell your accounts to other collection agencies
When can you get calls from collectors?
As per the FDCPA Act, collectors can call you between 8:00am and 9:00pm regarding payment related issues. They should stop calling at your office if you're not allowed to entertain collection calls there. Moreover, if an attorney is representing you regarding this debt, then the collector needs to deal with him.
How can you deal with debt collectors?
Check out the following tips and find out how to deal with debt collectors:
- Ask them to prove that you owe money: Send a debt validation letter to the collection agency via certified mail with return receipt request. This will help you know if the collection agency has been really authorized by your creditor to collect money. Don't acknowledge the debt if you're not the one who owes money.
- Dispute debt if it is not valid: If the collection agency is unable to prove you owe money, then dispute the debt in writing. You can send a letter via certified mail to the CA and inform them to not contact you again.
- Maintain all the records: You must pay an amount as per the records. Keep records of the conversations you had with collectors. Don't pay money just because you want to get rid of a harassing collector. Sometimes, collectors don't have proper records with themselves. So, keep records of all the documents for as long as you want. It may happen that you get a collection call for a loan which has been paid off 15 years back. The records and documents will be extremely helpful during those days.
- Protect your bank accounts: Keep separate bank accounts for your Social Security funds and the disability payments. The collector can freeze your bank account through a court-order. It will be very difficult to manage your family budgets during that period. So, keep Social Security funds and the disability checks (which are exempt from garnishment) in separate accounts. At least, you can easily use the money for meeting your expenses.
- Strike out a deal: Shake hands with the collector and negotiate a payment plan on valid debt on the basis of your monthly income. Set up an arrangement which won't make you cross your budget while making payments to the collector. Get help from a credit counselor or a debt negotiator if you can't make payments to multiple collectors on your own.
- Get a written agreement: Get the repayment plan in writing from the debt collection agency. The plan should be signed by a representative of the agency. This would help you avoid miscommunications regarding the terms and conditions of payment plan in future.
- Know about your rights: It is important to know about the basic consumer rights in order to deal with debt collectors. For instance, you've the right to ask collectors to validate debt after receiving a collection notice. You also have the right to ask the identity of collector, name of the collection agency and debt amount. Know about your right under the Fair Debt Collection Practices Act and find out what you can do if the collectors violate the laws.
- Complain if it is necessary: Don't sit back at home if you're being harassed by a debt collection agency. Search in the Internet and get the contact details of the state attorney general, FTC or a consumer attorney. A good attorney can tell you how to beat debt collectors at their own game. Take legal action against the agency in the event of extreme harassment.
What kinds of restrictions do they have?
Collection agencies are prohibited from taking some actions while collecting debts. Read below to know about them.
- Making collection calls incessantly
- Using abusive or dirty languages
- Giving false information about the debt or CA
- Threatening to hurt you in any way
- Sending papers that appear to be an official document
- Revealing your debt information to your relative or a third-party
- Pretending to be a government official or attorney
What should you do if collectors file a lawsuit?
Debt collectors can file a legal complaint when they don't receive payments from you. If a lawsuit is really filed against you, then give a prompt response to the summons on your own or through an experienced consumer attorney. Make sure to respond within the date mentioned in the court papers. This will help you preserve your consumer rights.
If collectors are able to prove that you owe money on a valid debt, then the court may issue judgment order. This will empower the collectors to garnish your wage/bank accounts and get back their money.