A debt collector refers to either an individual or company that collects financial debts from borrowers who have missed too many payments. Companies will attempt to collect these debts from borrowers. Dealing with debt collectors is difficult, as they often hound you to get the money owed. At their worst, debt collectors can pursue illegal tactics to harass you for payments.
The Fair Debt Collection Practices Act (FDCPA) protects you from debt collectors and ensures your rights are secured.
Before speaking with a debt collector, it is important to put together a plan for how you want to approach him or her. If you have concerns about the amount the collector claims you owe, or you do not believe he or she represents a legitimate collector, speak to an attorney or financial counselor. Listed below are some of the most effective methods to deal with debt collectors.
Get the Facts
Within the first five days of contact, a debt collector must send a written notice telling you the amount you owe, where the debt came from and what actions you can take if you believe you do not owe debt. This is mandatory under the FDCPA. Before speaking to a debt collector, ensure you have the proper information in writing so you can create a record.
Most complaints sent to the Consumer Financial Protection Bureau (CFPB) are aimed at debt collection companies. In fact, more than 750,000 complaints were filed in 2021 alone. Most complainers calling about debt collectors claimed they had been asked to pay a debt they did not owe.
When it comes to debt, accurate record-keeping often falls to the wayside. Many companies have inaccurate records regarding who owes the debt and how much is due. Here are some tips to help gather the facts before dealing with a debt collector:
- If the debt is truly yours, gather all the records you have. Collect all the information about the creditor and your payment history.
- Keep all records of communication between the debt collector and payments you have made prior. Certified mail is the best record of documentation to use.
- Request a letter of validation from the debt collector, if you do not receive one within the first five days of contact.
Debt collectors have a certain set of rules they must follow when speaking to consumers. The FDCPA outlines what debt collectors are not allowed to say when pursuing a debt. Debt collectors cannot:
- Harass you with repeated calls.
- Speak to anyone but you and/or your attorney about the debt owed.
- Misrepresent the amount of debt owed.
- Use abusive or intimidating language when speaking to you.
- Impersonate or claim that they are associated with a credit bureau representative, law enforcement official or attorney.
- Call you at your place of employment after you have asked him or her to stop.
- Call you before the hour of 8 a.m. and after 9 p.m. without your consent.
- Threaten you with legal consequences, such as going to court without serving you papers.
- Threaten to take your property or wages to pay your debt.
Do Not Give in Easily
Before communicating with the debt collector, take time to think through all your available options. It is important to get the facts first and not pay debts without verifying their legitimacy. Most consumers find themselves ashamed of their debt. Debt collectors prey on these feelings of shame and create unnecessary urgency.
If you believe this debt is not yours, do not pay and do not give any information on payments debt collectors can use later. When a debt collector calls, say as little as possible. Staying firm and consistent helps you keep control of the situation. In many cases, the debt collector is trying to determine if you have the ability to pay the debt.
Negotiate With the Debt Collectors
Debt collectors want to get any payment they can from you. If the debt is yours, it is important to implement a negotiation strategy. You may be able to work out a way to pay less than the full amount.
When you begin negotiations, make sure to obtain all details in writing for your records. If you are going to make a payment, using a cashier’s check rather than a personal check can protect your bank account information.
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Another negotiation tactic is to propose a deal where you pay the debt to get it removed from your record. With this deal, you pay the debt collector the full amount you owe. Once the payment is processed, the debt is removed from your credit score.
The debt collector is responsible for contacting the credit bureau to remove the debt. Although it is not technically against the law, the Federal Trade Commission (FTC) frowns upon this practice. Additionally, it is possible your debt collector may refuse to do it.
However, if your debt collector agrees to this deal, make sure you get the agreement in writing. This is a great strategy for dealing with a bill you lost or forgot about but is now in collections. When the debt collector removes the collection amount from your credit report, your credit rating should improve.
Know Your Rights and Use Them
The FDCPA protects you from predatory and illegal collection tactics performed by debt collectors. Debt collectors are required to be honest with you. You have control over how and when debt collectors are contacting you. Additionally, you have the right to legally dispute the debt.
The debt collector cannot ask you for any payment until the dispute is settled if the debt is challenged within 30 days of initial contact. If the 30-day timeframe has passed, you can challenge the debt. Keep in mind, however, that the debt collector can still contact you for payment while the dispute is ongoing.
If you believe your rights have been violated under the FDCPA, you can file a complaint with the CFPB. Your state may offer you additional protection as well. Check with your state attorney general’s office or local legal aid for more assistance.
Understanding your state and federal protections throughout the debt collection process is extremely important. Knowing how to exercise your rights as a consumer unapologetically can set you up for success in dealing with debt collectors.
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