How to Deal With Debt Collectors
There’s nothing quite like the sense of shame that washes over you with every “Final Notice: Account Overdue” letter you shove into your junk drawer or the anxious lurch of your stomach when an unrecognized toll-free number appears on your caller ID. Are debt collectors calling?
Paying your debts is necessary, just as you want people to pay money they owe you, but there’s a fine line between legal collection practices and downright harassment.
Make sure you educate yourself on proper debt collection practices and learn how to negotiate the best deal for your wallet and credit score.
Don’t Cave to the Pressure
It’s dangerous to dive blindly into a conversation with a debt collection agency. Debt collectors are highly trained and know exactly how to talk you into a corner. Since they work on a quota system, their only goal is to shame and guilt you into surrendering a payment.
You might feel pressured to accommodate their requests for fear of getting in more “trouble” or allowing your debt to spin out of control. Despite this, you should never cave to the pressure to pay upon the first contact with a debt collector. Tempted as you might be to promise payment just to make the daily calls stop, don’t do it. And definitely don’t provide your card information for payment at a later date.
Paying even $10 toward your debt acknowledges it is your debt. It also resets the statute of limitations on the debt. This means the clock sets back to zero and gives the creditor more time to trash your credit score with the collection report, file a lawsuit, or even attempt wage garnishments.
Stay strong and refuse to acknowledge ownership of the debt or make any payment toward it. Hang up and follow the next steps to arm yourself with information.
Keep Records of Messages and Control the Facts
Debt collectors must adhere to strict federal laws that outline how frequently they can contact you and the language they can use. If you feel like a certain debt collection agency is calling you too frequently, start keeping records of every call and message you receive. You can contact the Consumer Financial Protection Bureau to file a complaint.
At the same time, educate yourself on the reality of your debts. Thousands of consumers receive calls every day regarding debts they don’t actually owe, and you could be one of them!
Follow these steps to control the facts on your own terms:
- Request a validation letter from the debt collector. It should include all relevant details of your debt, including its amount, company of origination, and how to file a dispute.
- Go online to review your credit card accounts, confirming on the card issuer’s website the amount due and your delinquency.
- Create your own debt records using your credit report, payment history, and account knowledge.
If you notice any discrepancies, don’t just assume you’re the one who’s wrong or misreading the info. Debt collection agencies make errors every day. You have every right to challenge collections that you don’t deserve.
Know Your Rights
Even if you owe money and are delinquent in repaying your debts, you’re still entitled to protection from harassment and predatory collection behavior. The Fair Debt Collections Practices Act is a wealth of information that outlines your specific rights as a consumer.
Use your rights to their fullest extent to deal with debt collectors efficiently:
- Report profane language, threats, and constant calls
- Report any dishonesty presented by a debt collector
- Dispute the debt if you believe it isn’t yours
- File a complaint with the CFPB if a debt collector violates your rights
Know How to Negotiate
If you confirm that the debts being collected are indeed yours and you are ready and willing to pay them off, you can consider negotiating. Debt collection agencies are happy to get what they can, so you do have some leverage to demand a better deal:
- Offer 10% of your total balance
- Consider the counteroffer, which will probably be between 30-50% of your total balance
- Ask for details in writing before you agree to pay off your account
Alternatively, you can request a payment-for-deletion deal. This is a valuable tool if you want to remove the collection from your credit report entirely. Offer to pay a certain amount in exchange for the debt collector sending deletion letters to the credit bureaus. Some are more willing to agree to this negotiation than others. Always, always, always get the agreement in writing before you pay!
As you can see, debt collection doesn’t have to cause crippling fear. You don’t have to approach the mailbox every day in trepidation. You can take control of your conversation with the debt collector, and even use the situation as leverage to pay down your total debt.
Don’t wait to get out of debt! Read this: A Complete, Step-By-Step Guide to Get Out of Debt.