Does your heart skip a beat when the phone rings because it might be another debt collector? You probably have been trying your best to avoid them because they are not fun to talk to. But avoiding debt collectors won’t make them go away. In fact, it might even make things worse.
If you are past due on your debt then it is your obligation to pay that debt back but you don’t have to be bullied into it. Knowing your rights as a consumer and how to deal with debt collectors will make the process a little less stressful. Here are the Do’s and Don’ts with dealing with collectors.
Do – Know Your Rights
Some debt collectors will use every nasty tactic to insert fear in you to try to get you to pay your debt. The Fair Debt Collection Practices Act (FDCPA) was passed by Congress in 1977 to protect you (the consumer) from dirty practices from collectors. Here are some of your rights as the consumer.
- Debt collectors cannot call you during unusual times- early morning and late at night. They are allowed to call you between 8am and 9pm.
- They must identify themselves and the reason for the call. If they do not do this, ask them. If they avoid your question, keep asking.
- Collectors cannot contact you at work. If they do, tell them that number is your place of employment and they must remove it from their list.
- The person whose name is on the debt is the only one they are allowed to speak to regarding the debt. They cannot talk to family, friends or employees about the details of the debt. This also includes harassment. They cannot threaten other family members.
- Collectors can’t use any inappropriate language. If they do, ask to speak to the manager. You can also report them to the Better Business Bureau (BBB).
Do – Be Nice To Debt Collectors
You know the old saying, “kill them with kindness?” Debt collectors are used to people getting upset with them so do your best to keep your emotions in check. I know it can be hard, especially when they aren’t being kind themselves, but getting upset is what they want you to do because they think it will make you pay them. It may seem like they are in charge of the conversation but remember you are the one in charge! It is your money and your life!
Do – Take Notes
For each conversation you have with a debt collector, take good notes of the conversation. Note the name of the agent, date and time of the call, summary of the main points discussed and the summary of the action plan.
Depending on the state you live in, you may be able to record the conversation. Recording phone conversations depends on state laws so make sure your state laws first. You will also want to tell them that the conversation will be recorded.
Do – Make Your Budget
A lot of people end up in more financial trouble because they pay the debt collector first instead of taking care of themselves. You must take care of yourself and your family first by doing your budget each month. Cover your basic needs before paying collectors. Those needs are food, shelter, utilities and transportation.
Once your basic needs are covered then you can use any extra money towards your debts. For example, if you have $100 a month say “I can pay you $100 a month at this time until the debt is cleared.” They will most likely push back trying to get you to pay more but reinforce the fact that is all you can do now.
Do – Keep Your Promise
When you and the creditor reach an agreement on how you will pay off the debt, do keep your end of the deal by paying what you promised. If anything changes and you are not able to pay what you promised then notify them of your situation and what you are able to do. As long as you are making your payments consistently they should stay off your back. But if you don’t you will hear from them. This happened to me with a medical bill. I told them I could pay $500 a month until the debt was cleared. I forgot about it one month and they did not hesitate to reach out and remind me of our agreement.
Don’t – Trust What Debt Collectors Say
ALWAYS get your payment agreement in writing. Request that they send you a written confirmation through mail or email of the payment that was agreed on. Do not make any payments until you receive that confirmation from them. Without a written agreement you may get stuck in their trap when they try to get more money from you the next month.
“You can tell they are lying if their mouth is moving.”
Dave Ramsey
Don’t – Give Debt Collectors Your Bank Information
Typically automatic withdrawals for payments are a convenient way to make payments so you don’t forget but this can be dangerous with a debt collector. By setting up automatic payments you are giving them open access to your banking information. The really sleazy collectors might take advantage of this and withdraw more money than you planned for. And that can put you in a tough spot when they clean out your checking account. Instead, send them a check or use a prepaid debit card.
Your Debt, Your Plan
Their main objective is to get paid and unfortunately they may use abusive techniques to guilt you into doing so. This is not about avoiding them and hoping they will go away. You took out the debt so it is your obligation to pay it back. Just remember to take care of your family first and keep an open line of communication with them. As long as everyone knows what the payoff plan is, it can be less stressful.
Remember your plan starts with knowing how much money you need to cover your necessities so you know how much you have to pay off debt. That all starts with a making a plan for your money.