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Last Updated on January 5, 2021
If you’re having financial difficulty, one of the most dreadful and embarrassing sounds is the phone ringing when debt collectors begin to call. They will call for any late payment from credit cards and medical debt to student loans and more. Debt collectors are not trying to be troublesome and anxiety-inducing, they are just doing their jobs.
When you are ill-prepared for dealing with debt collectors, you run the risk of putting your finances in danger. It is best to stay calm and learn how to speak to these persistent people. If you find that you are not prepared to talk to them or if you are too busy to talk, you can tell them that you are busy. If they do not let you off the phone, you can hang up.
Instead of panicking and avoiding answering the phone, there are several things you can do. It is wise to learn how to protect your money, your rights, your personal information, and your sanity as soon as you realize that you are going to have financial struggles. If not, you could make mistakes that could allow debt collectors to get the better of you.
Table of Contents
1. Understand your rights.
The first thing you should do before taking any steps is to know your rights as a consumer. You have a right to not be harassed, threatened, or abused over the phone. If you are receiving phone calls that could be considered threatening, harassing, or abusive, then you should report the phone calls to the United States Consumer Financial Protection Bureau (CFPB). Debt collectors do have rules to follow and they are clearly explained to consumers in a document called Fair Debt Collection Practices.
2. Record conversations.
If you are worried about harassment or threats from debt collectors, then record all of your phone conversations with them. There are some states that have outlawed recording phone conversations, so be sure you have a right to do it. Even if it is legal to record phone conversations, you should tell the debt collector that you are recording the conversation. They won’t know if you really are or if you are bluffing. This can keep debt collectors from being abusive over the phone. And, it gives your proof if they are abusive.
3. Apply for a consolidation loan.
You can also look into a debt consolidation loan. These loans often have low interest rates and they can help you pay off your debts quickly. With a debt consolidation loan, debt collectors will stop calling you. Loan info found here can help you manage your money and avoid anxiety.
There are standards that consumers must meet to be able to qualify for a consolidation loan. Because consumers still need to have good credit before applying for a consolidation loan, it is wise to apply as soon as trouble begins before your credit report starts to nosedive. With a consolidation loan, you can take several payments and consolidate them into one affordable payment.
4. Protect your money.
After a period of time, debt collectors can move to legal actions. Once they file suits with courts, you could have your bank accounts frozen. You could also have payments automatically deducted from your accounts. If you have exempt income, like Social Security or disability payments, you should look into having separate bank accounts to hold that money securely. I
f you have filed for bankruptcy, you should let debt collectors know so they will not be able to access your money. Some people will take their money out of their bank accounts as soon as debt collectors begin to call. If you do not have money in your accounts, there isn’t anything that debt collectors can take. However, if you have direct deposit, you will need to cancel that and find an alternative for cashing your paychecks.
5. Be secretive.
Never give out your personal information over the phone. You should never give out your Social Security number or bank account numbers to debt collectors over the phone. If you do need to share those numbers, you should only do so after the debt collector has sent you something in writing. Usually, they will make requests through third-party payment systems.
To protect your bank account numbers, do not make any payments with a personal check. Instead, use money orders or certified checks from a different bank. Doing so makes it more difficult for debt collectors to figure out where you bank. You should also never give out any information about where you work, how much you make, and what other bills you might have. Debt collectors not only want to collect money, they want to collect information that will make it easier for them to get money through lawsuits.
6. Use certified mail.
If you must mail anything to debt collectors, only use certified mail with return receipt. This way you will have proof that they received the correspondence. Letters do get lost in the mail and it would be ashamed if yours did, especially when dealing with something as serious as debt collection. You can also use certified mail to send cease-and-desist letters if the calls become too bothersome. Debt collectors will use certified mail to contact you if they are beginning court proceedings.
7. Know your financial status.
It is a good idea to be aware of your financial status. Debt collectors might not have an accurate picture of your financial status, especially when it comes to how much you owe. You should know how much money you make, how much you must pay each month, and how much you could pay toward your debts.
Debt collectors will often be satisfied with some type of monthly payment, but you won’t be able to arrange them if you do not know what you can afford. It is better if you set up the payment plan, so it fits with your lifestyle and financial status.
You should know about your debts, too. It is wise to understand the interest rate you are paying as well as the balance of each account. If debt collectors have different numbers, you should contact your credit bureau to report the inaccuracy. It is commonplace for inaccuracies to be published on credit reports, too.
8. Learn how credit reports work.
You should know that debts do fall off of credit reports. So, if you don’t mind getting debt collector phone calls, you can simply wait until the debt drops off. It can take several years for this to happen, though. You won’t go to prison for having an unpaid debt, but you could have difficulty buying a new car or getting credit to buy a home. You certainly do not want to have all of your debts go into default, but one won’t kill you.
There are statutes of limitations on debt collection, so after a while, creditors and debt collectors will stop calling. But, if the debt is excessive or you have put up collateral, you will most likely have to make some payments or you will eventually see court action.
The magic number for credit reporting is seven years. But, if you have an unpaid tax lien, it could remain on your credit report indefinitely. If you do file for bankruptcy, that financial event can remain on your credit report for up to 10 years. There are some different statutes for residents of different states.
9. Make no promises.
When you begin getting debt collector phone calls, do not rush to pay and do not make any quick promises to pay. Even if you pay just a little bit, debt collectors have the advantage and can create more problems. The best advice is to ask the debt collectors to tell you about the debt and tell them you will call them back later. Never give out any information that can be used against you and never acknowledge the debt.
Before you say one word to the person on the other end of the phone, pause, take a deep breath, and then ask for a validation letter. You should receive it within five days of the phone call. While you are on the phone with the debt collector, use a pen and paper to record the time and date of the call. If you can get the name of the caller and the creditor, record that, too.
10. Dispute your debt.
It is important that you know you can dispute the debt. A challenge to the debt in the first 30 days after the phone call will quiet the phone for the next 30 days. However, if you do not challenge the debt within that window, the dispute will be investigated, but the debt collector can still call you. You should receive a letter that verifies the debt. Be sure that you keep the dispute letter. You can use a sample dispute letter to send to your debt collector and the debt collector has to respond within a set amount of time.
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