How to deal with Debt Collectors
One of the more embarrassing and frightening things that can happen to someone in the area of personal finance is to be contacted by a debt collector. During this time of economic uncertainty, more and more people are finding themselves faced with this situation. With rising food and utility prices, often times the additional income that used to be used to pay off debt, is now being used to help meet the basic necessities of the family. The one thing that will not help your situation if you find yourself dealing with collectors is to ignore the situation; doing nothing will cause the situation to deteriorate very quickly.
According to an article by CNNMoney.com, in 2007, more than 5500 collection agencies made more than 1 billion contacts with consumers. The debt collection business has grown dramatically as consumer debt has reached $2.9 trillion. With this enormous amount of debt, new collection agencies are popping up everywhere. Technology advancements have helped collectors reach more people in less time and that causes increased pressure on those that have fallen behind in making monthly payments. According to CNNMoney.com:
As the economy turns further south, cash-strapped consumers let debt repayment fall by the wayside and collectors have to work harder to collect on it – and are using more advanced ways to do it.
Because of the increased number of people that are dealing with debt repayment, the opportunity for scam artists has also increased. Knowing what is and isn’t allowed will help determine if the person calling you, is a real collector and what they can and cannot do to collect on your debt. The Federal Government passed the Fair Debt Collection Practices Act that outlines the process that collectors must follow when working with you to settle the debt you owe. Here are just a few of the more important things for you to understand:
- Within the first five days of receiving your account, collection agencies are required by law to contact you and “verify the debt” — provide documents that prove the debt belongs to you.
If a customer requests verification, a debt collector cannot continue to try to collect until verification is provided. - Collectors are only allowed to contact a consumer at home between the hours of 8 a.m. and 9 p.m. in the time zone of the consumer, not the collector.
- A collector cannot contact you at work, but they can legally contact your current employer to verify that you work for the company. They cannot ask for your work phone number, supervisor’s name, dates of employment or other information.
- If, after a prescribed amount of time, a collector is unable to contact you, they can employ other tactics including Internet searches, Lexis-Nexis searches and credit bureau file look-ups. They then can contact friends, relatives and neighbors in the attempt to get in touch with you.
- The collector is not allowed to disclose anything about the debt to your associates, family or friends unless you have authorized it in writing. They may however, ask for a few digits of a social security number or an address to try and verify that you are the debt holder.
There is one last thing you need to understand when working to settle your debt. A collector would prefer to get a lump sum payment of the entire debt (and will use a lot of pressure to get you to send the payment), but most of the time they will work with you and either set up monthly payments or settle for a fraction of the total debt, if you agree to send the payment immediately. If you do work a deal with the collector, do not send any sort of payment until you have the terms of the agreement in writing and do not give the collector electronic access to your bank account. Send them a cashier’s check, via registered mail and keep your receipt and the returned receipt indicating the collector received your payment. You should keep a copy of all written documentation in a file just in case a question arises following the completion of the agreement.
Related Websites - Debt Collector Terrorizes Sammi Out Of $422.58...Though Sammi's Fears Are Just Beginning!
- Paying Debt Collection
- Stamp Collector
- How to Get Credits to Stop Harassing You
- I got a call from a debt collector
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