How To Handle Debt Collectors The Right Way – Professional Tips
Dealing with Debt Collectors Correctly
If you're behind on a payment for a credit card, loan, or utility bill, there's a good chance you'll be contacted by a debt collector. Debt collectors can be difficult to deal with, learn how to handle the situation when you're being harassed by an individual or company who is trying to collect money.
- When and How are Collectors Allowed to Contact You?
- Inappropriate Behavior
- How to Handle a Collector
- Working Out a Plan for Repayment
- Debt Disputes
What Exactly is a Debt Collector?
A debt collector may be an individual that works for a private debt collection agency or for a service or credit provider. They may contact you in order to:
- Give you information about the status of the account
- Explain what will happen if you don't pay or insist on payment from you
- Review your existing arrangements, make a payment agreement, or offer to settle your account
- Recover goods that have been mortgaged
- Find out why you have not answered past attempts to reach you or why you aren't keeping to a repayment plan
Important: Are You Being Taken to Court?
If you are notified that a creditor is taking you to court (like a summons, a statement of a claim, or other legal paperwork) seek out free legal advice as soon as possible. Don't ignore the paperwork. Judgement can be entered against you if you fail to take action. The creditor may then be able to enforce a judgement by repossessing the goods so that they can sell them and then get their money back.
When and How are Debt Collectors Allowed to Contact You?
Collectors are allowed to contact you by social media, phone, letter, email, or even by visiting you in person.
Smart Tip: Keep a clear record of any and all communication with debt collectors. Include how the contact was initiated, the name and company, and the date and time of contact, as well as a summary of the message.
Debt collectors are required to respect your privacy and legally cannot mention that they are a debt collector or tell another person about your financial situation without you giving them permission.
Debt collectors are only allowed to contact you at certain times. For example, they aren't allowed to contact you about debts on national holidays. Other rules include: Debt collectors should not call you excessive throughout the week or month with the goal of harassing you, although they can call you multiple times in a week. They are not allowed to contact you before 8:00am or after 9:00pm, and if you work nights, they may not be allowed to contact you during the day when you are sleeping.
If you don't want to receive any more calls, you can contact the collector in writing and ask that they stop calling you. After this, they cannot continue to contact you except to tell you they will stop calling you, or that they are pursuing other action.
It's against the law for a debt collector to do any of the following:
Trespassing, threatening you, or intimidating you: This includes behavior like threatening force toward you or anyone else, damaging property or threatening to damage property, blocking access to or exit from your property, or remaining on your property and refusing to leave, unless they have a Court Order. If someone is behaving this way, call the police.
Harassment: This may include shouting at you, making personal comments, using obscene language, or contacting you repeatedly or at unreasonable times.
Making Misleading Remarks or Engaging in Deceptive Conduct: Collectors cannot make untrue statements about what will happen if a debt isn't paid, send documents designed to look as if they're court papers, or act like an attorney, court, or legal agency.
Debt Collectors Shouldn't Take Advantage of You:
- If you are at a disadvantage because of illiteracy, age, illness, or disability, or
- If you are unfamiliar with the law, collections, or the consequences of not repaying a debt.
- If you feel as if a debt collector's actions aren't acceptable, you can either complain or write a letter to your lender about the harassment.
How to Handle a Collector
If a debt collector contacts you, be cooperative and polite but understand that you have the right to be treated professionally.
It's also important that you:
- are honest about your finances, especially your other debts.
- return calls or answer their correspondence in a timely manner.
- agree to a payment arrangement that you can afford.
- tell the debt collector if your contact information changes.
Beware of Credit Repair
It could seem like a good idea to pay someone to help you repair your credit issues, but credit repair companies cannot always do what they advertise. Be careful dealing with anyone who promises a "credit repair", "credit fix", or "debt solution". In many cases, historical information can't be removed from your credit report unless it is clearly proven incorrect.
Get detailed credit history information here:
- Understanding credit reports
- The facts on credit repair and how you can do it yourself
- Understanding credit scores
Working Out a Plan for Repayment
If the debt belongs to you, but you will struggle to repay it, a collector may work with you to extend the payment period or let you make smaller payments. You should be prepared to give them information about your finances so that they can see what you can afford to pay.
In some cases, a debt collector will let you settle the entire debt for a lump sum payment of a percentage of the total, but only agree to what you can afford.
Be honest about your debts and the cost of living.
Stick to a repayment agreement if you can. If you can't afford the amount you've agreed to, reach out the collector again as soon as you can to discuss what you can actually afford. If you aren't able to pay what you've agreed to, reach out to the collector again as soon as you can and work out a manageable payment agreement. If you can't afford to make any payments on a debt, get free legal advice.
Keep Detailed Records
If you come to an agreement with a collector, be sure to get a confirmation in writing. Keep a copy of any correspondence that you send, as well as any bills, records, or receipts you get from them.
File these together so that the information is available when it is needed.
If the payment plan is rejected:
- If the collector rejects your proposal, explain the situation to them in writing and tell them what you can afford to pay and when.
- Do not be pressured into a repayment plan that you cannot afford, and do not borrow additional money.
- If you can't come to an agreement, consider reaching out for free legal advice.
Smart Tip: Read any written statements carefully to see if they contain additional expenses or fees, as well as any contracts that you have. Find a financial counselor or attorney if you feel these are unfair or unwarranted.
If you feel that a debt isn't yours, or if you dispute the amount owed, ask for copies of your bills and your account information. If the collector is working for a creditor, they can refer your request to the creditor and get you the information you need.
If you plan to dispute a debt because you don't think you owe it, you think you only owe part of it, or you have a legitimate reason not to pay:
Reach out to the creditor and let them know that you dispute the debt.
Find out how to file a complaint.
If you are contacted about a debt that you have already paid, explain the situation to the collector and provide them with documentation that the debt has been paid. If the collector continues to contact you, research how to complain about their behavior.
Dispute the Amount
If you are aware that you owe a debt, but disagree with or simply aren't sure about the amount owed, ask for documentation of the debt that demonstrates:
- The date and the full amount
- How it was determined
- Details of all payments made
The debt collector should stop contacting you until you have obtained this information from their office.
They should not add a listing to your credit report during this time period.
Working with debt collectors is a stressful process, but there are laws in place to help keep them from making you miserable.