SAVING YOUR SANITY: HOW TO DEAL WITH DEBT COLLECTORS.
What are debt collectors?
Debt collectors are collection agencies, debt buyers, and lawyers who regularly collect debts from individuals as part of their overall business. There are also dedicated companies out there that buy past-due debts from creditors and then attempt to collect them.
The assumption that debt collectors often use questionable and sometimes even illegal tactics isn’t wrong.
Debt collection is among the most prevalent and notorious topics of consumer objections about financial products or services, according to the CFPB.
Why do you have to deal with debt collectors?
There are a couple of possibilities here. The first is that a credit card issuer may use its in-house debt collectors or even hire a debt collection agency to collect a past-due debt that you owe. Debts sent to collections can include things like:
- Credit card
- Car loan
- Medical/hospital bills
- Student loans
- Mortgage payments
Another potential factor is a debt collection agency may purchase a past-due debt from a creditor at a discount in the hopes they can profit off of the transaction by receiving the full payment.
Clearly, these collectors have a financial incentive to pursue payment and sometimes that is done in a discriminatory or questionable manner.
Tips on how to deal with debt collectors
1. Knowing your rights-
If you owe on a debt, it should be paid back. However, you should not have to tolerate practices that are meant to intimidate you into paying immediately.
These collectors can’t harass you, lie to you, or manipulate you in any way to get the debt resolved. Know that abusive, unfair, or deceptive tactics are off-limits.
2. Be organized and get everything in writing-
Make sure you know exactly what you owe and have that be clear at the onset from the creditor, not the debt collector.
Don’t do anything once you get that initial call either. A collector also has to send you a written “validation notice” within five days of first contacting you. The notice has to say how much money you owe, the name of the creditor you owe it to, and what to do if you don’t think it’s your debt.
If you don’t think you owe any money, you should send a debt collector a letter asking for verification of the debt. If you send the letter within 30 days of getting the validation notice, the collector has to send you written verification of the debt like a copy of a bill that you supposedly owe before it can start trying to collect the debt again.
3. Consider other options to repay-
If at all possible, first try to work out an arrangement with your creditor before a bill is sent over to collections.
Another option if you’re having difficulty with collections is to seek out a nonprofit credit counseling agency. They may be able to help work something out with your creditors in terms of a repayment plan. If it’s looking unlikely you’ll be able to pay back your debts, or if debt collectors are hounding you, you could try to request a free consultation with an attorney that specializes in bankruptcy.
Even if you decide not to file for bankruptcy, the attorney can tell you what a creditor is allowed to do and what they can and can’t collect on.
Bottom line
In an ideal world, by making all your monthly payments, you wouldn’t even have to get into a situation with debt collectors. However, if it’s already too late for that, it’s important to know your rights and how to spot predatory practices. Hopefully, with these tips, you can pay off what you owe, or at the very least get a better understanding of how to deal with debt collectors.
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