How to Handle Debt Collectors

Key Takeaways

• Ignoring debt collectors could lead to legal action and a judgment against you.
• Always verify the debt before making payment arrangements to ensure the accuracy of both the bill and the amount owed.
• Delinquent accounts could allow you to pay less than the total amount through new loan terms.
• A debt settlement company can help you deal with debt collectors if you find the process intimidating.

Daily calls from bill collectors, threats of legal action, and calls to family and friends cause stress and anxiety. You think to yourself, “If I had the money, I’d pay it. The reason I’m avoiding debt collection calls is that I don’t have the money.”

When an account becomes delinquent, sometimes by even a day or two, debt collectors begin calling demanding a payment. If it was an honest error, you can jump online and pay the balance owed to catch it up. But what occurs when you can’t pay the bill?

Debt collection calls are more than annoying. They can cause stress and could result in decisions that make your financial situation worse. If you are receiving debt collection calls for a bill you cannot pay, here are the steps you should take:

Don’t Avoid Debt Collectors: When you can’t pay the bill, avoiding debt collectors may seem like the right thing to do. However, it could worsen the situation because dodging calls leaves them with no option but to sue for payment. Read more about what can happen if you avoid calls from debt collectors here (internal link).

Verify The Debt: In the first conversation with a debt collection agency, you should gather information about the delinquent bill and request debt verification. The company cannot contact you again regarding the debt until they send the confirmation.

Verifying the debt does two things: First, it gives you 30 days to develop an action plan. Second, it requires the agency to send you proof that you owe the bill. You will receive data regarding the original loan along with documents verifying the balance owed. Without debt verification, you cannot be sure the agency is authorized to collect the debt.

Don’t Disclose Personal Information: The phrase, “Anything you say can and will be used against you,” is true with debt collections. Providing information about your job, assets, or the state of your finances can give the agency information they can use to force payment on the debt.

Think Twice Before Issuing a Cease-and-Desist Order: The law provides a way to stop debt collection calls and letters through a cease-and-desist order. Unfortunately, doing so could lead to faster legal action because ending communication prevents the creditor from negotiating new loan terms or offering payment arrangements.

Know Your Rights: The Fair Debt Collection and Practices Act (FDCPA) gives you certain rights and sets the standard on what debt collectors can and cannot do. When a company violates the ACT, it could provide you with leverage in the negotiations or the right to sue the company due to illegal collection actions.

The FDCPA restricts when and how companies can communicate with you. It prohibits all actions considered deceptive, unfair, or abusive. Learn more about how the FDCPA law protects you here (internal link.)

Final Thoughts

Avoiding collection calls or issuing a cease-and-desist order can lead to faster legal action. Instead of evasive measures, learn your rights, so you are better prepared to discuss your delinquent account with a debt collector.

If discussing your debt with bill collectors is an intimidating prospect, you can partner with a debt negotiation specialist to deal directly with creditors on your behalf. Working with a debt settlement company can help you negotiate lower payoffs and avoid legal action against you.

FAQ

• How should I deal with debt collection calls?

  Ignoring debt collectors could escalate your file and lead to faster legal action against you. The best way to respond to debt collectors is toverify the debt and then discuss payment options.

• Can I avoid debt collection calls without any negative consequences?

  Lenders and debt collectors have legal ways to force payment on a delinquent account. Avoiding or ignoring debt collection efforts could lead to legal action and compulsory payments through wage garnishments or account levies.

• What can debt collectors do if I ignore their calls?

  The remedies available to a debt collector depend on the type of debt you owe. Secured debt will lead to the repossession of the asset guaranteeing the loan. If the lender does not receive enough to pay off the account from the sale of the property, the company can sue for a default judgment for the remaining balance. Unsecured debts offer fewer ways to collect. However, the lender can sue and garnish your wages to pay off the account after receiving a judgment.