How to Handle Debt Collectors

How to Handle Debt Collectors
David Andrew
By: David Andrew
Posted: September 13, 2013's popular "How-To" series is for those who seek to improve, rebuild or better understand their subprime credit rating.

Being in debt is stressful enough. When you are constantly being contacted by debt collectors, the situation can seem even worse.

There are a few strategies you can use to keep the debt collectors in line while hopefully creating a plan for handling your financial issues.

1. Ask for a written summary of the debts.

If you are ever contacted by a debt collector, the first thing you should do is ask for a written summary of the outstanding debt.

By law, the debt collector needs to send you this information so you can see the amount of money you owe and the name of the creditor trying to collect on the debt.

Once you get this written summary, you can see whether you actually have something you need to pay back.

2. Send a written dispute against incorrect debts.

After seeing your written summary, you may realize the debt collector has made a mistake. Mail back a written dispute saying you do not owe any money.

The debt collector should have explained where to send this dispute in your summary of outstanding debts.

When you send in this information, the debt collector is legally obligated to stop contacting you until the agency can prove you have an outstanding debt.

You may want to send in your dispute via certified mail so you have proof of sending in this information. Otherwise, the debt collector may claim it did not receive anything and they will keep calling you.

3.  Be polite, but say only what you need to.

While it is stressful to talk to a debt collector, you need to stay as calm as possible. Be polite and never lose your temper. You will likely say something you regret.

While you should be polite with debt collectors, you should be firm as well. Try to end the call as soon as you can while revealing as little as you can.

Debt collectors will try to squeeze information out of you about your current assets and income in preparation for a lawsuit. Do not help them here.

Only reveal the information you want regarding your plan to pay off the debt. Then try to end the call.

“Don’t assume the debt

collector is correct.”

4. Keep an eye out for illegal contact from the debt collector.

There are a strict set of rules debt collectors need to follow when they contact people.

A debt collector is not allowed to use obscene or abusive language. They are not allowed to call you before 8 a.m. or after 9 p.m. They are not allowed to call you at work if you ask them not to.

These agencies also are not allowed to threaten to sue you or garnish your wages or property unless they are actually about to make these moves.

If a debt collector breaks any of these rules, tell them they need to stop or you will report them to the Federal Trade Commission, the government agency that regulates this industry.

5. Try to negotiate a settlement.

Debt collectors want to resolve your situation as quickly as possible. This could give you a chance to negotiate.

During one of your calls, ask if the agency would be willing to settle for a smaller amount of money upfront. They may be willing to take less money in exchange for not having to go through all the work of collecting everything.

If you have the money for a settlement, this could be the best way to solve your debt problems.

Dealing with a debt collector is not fun, but by following this advice, you will make the process as smooth as possible.

Hopefully, with a little planning, you will be able to come to a fair resolution to your debt problems.