Life can be pretty stressful if you are facing debt that you cannot pay off. However, conditions become significantly worse when debt collectors start calling you. While paying off your debt is important, you should be aware that there are certain tactics you can use to stop debt collectors from calling you at all hours of the day and while you are at work.
Answer the phone. If you know that a debt collection agency is calling you, do not ignore the call. Pick it up and listen to what the collection agent has to say. Failure to respond to a collection agency’s calls (or letters) may result in you getting sued.
Know your rights. If debt collectors start calling your boss and family members threatening to sue you, or are calling your home and place of employment at all hours of the day, find out just what your rights are. The Fair Debt Collection Practices Act was created by the Federal Trade Commission to protect consumers from abusive debt collection agency practices.
Decide on a strategy. When a debt collection agency purchases a debt, it pays a certain percentage of the total amount and never the entire sum of the debt. Even if the agency receives only 30 to 50 percent of your outstanding debt, it may still turn a profit. You can use this knowledge to your advantage while negotiating with the debt collector. For example, if you owe $1,000 on a credit card, you may negotiate to pay $500 on your debt right then. Many times your offer will be accepted, since $500 will still provide the agency with a profit.
Know when to negotiate. Most debt collection agents work on a commission and need to report their activities at the end of the month. By choosing to negotiate your debt on the 27th instead of the 17th of the month, for example, you could obtain a much better repayment deal from the debt collector.
Do not agree to pay any debt without investigation. The debt collection agency may be attempting to collect on a debt that you dealt with a long time ago. So-called “zombie debt” does not need to be paid off if it was indeed settled and closed. Even if the debt was not settled, it may have passed the statute of limitations for repayment. Investigate any debt before agreeing to repay it.
Keep all records. If you make a payment to the collection agency, keep a record of that payment. Send the payment by certified mail so that it must be signed for in order to be received. Also, confirm with the debt collector that the payment was applied toward a certain debt. If possible, record your calls for future reference. There are 35 states and the District of Columbia that allow you to record calls without the other party’s permission; the other 15 states require that you ask for permission first. The Reporters Committee for Freedom of the Press publishes a list of states and their laws on call taping.
Do not divulge personal information. Many consumers give out unnecessary personal information about their place of employment, whether they have savings or checking accounts, etc., when talking with a debt collection agency. Other consumers inadvertently provide their checking or credit card account numbers when sending a payment. This provides additional information to the debt collector about your financial status, and may even result in the agency accessing your accounts. If at all possible, make payments through a certified bank check only, and keep the carbon copy in a safe place.