How to deal with a debt collector

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So, you’ve been getting calls from a debt collector. What now? Believe it or not, all hope isn’t lost when an account go to collections. Read on to learn how to deal with a debt collection agency and how to get your finances back on track.

1. Take their phone call 

One thing is certain when it comes to debt collection agencies: They won’t go away if you ignore them. However, the more information you have early on, the easier it can be for you to deal with these agencies and move on with your life. 

Therefore, take that first phone call. Don’t succumb to any scare tactics and don’t give out any personal information. Just ask the agency for details such as what company it bought the debt from, the original creditor (if it’s not the same as the company that it bought the debt from), how much you owe, any additional fees and what the collections process entails. According to the Consumer Financial Protection Bureau (CFPB), debt collection agencies must give you this information. 

If the agency sends you a letter instead of calling you, you can call the number on that letter to acquire more information. You don’t have to act on any of this information at first — the idea here is to make yourself fully aware of the collection situation as soon as possible so that you can form a plan.

Keep in mind that debt collectors don’t have the right to harass you. Thanks to the Fair Debt Collections Practices Act, collection agencies aren’t allowed to call you at odd hours or while you are at work (if they are aware that your employer prohibits it). Additionally, these agencies shouldn’t call you if they know an attorney is representing you — they should contact the attorney instead.

Take that first call to gather information, but don’t let these agencies harass you.

2. Validate the debt 

The next thing you’ll want to do is validate that the debt the agency is calling about is indeed yours, as well as that that agency is the legitimate owner of the debt. Calling the original owner of the account — the lender or financial institution you were working with in the first place — to gather information is an effective next step. 

Ask that institution such questions as whether or not it sold your account to a collection agency. Additionally, ask that lender or institution when it made the sale and to whom it sold the debt. The more information you can get, the better. After that, compare the information you gathered with the collection agency’s details (address, name, etc.) to ensure that everything is legitimate.

Once you know for certain that the agency you’re dealing with owns your debt, the next step could be to ask that agency for validation of the debt. You might want to skip this step if you already know for sure that you owe that debt. At that point, you might as well start negotiating with the agency instead of dragging out the validation process. (Ever wonder exactly what happens to your debt when it’s sold to a debt collector? Read this.)

3. Work Out a Deal 

Finally, it’s time to negotiate. Remember that debt collection agencies buy debt for much less than its original amount. Sure, they might want to get that entire amount, but there’s also a reasonable chance that they’ll be willing to take considerably less. These agencies typically pay pennies on the dollar when they purchase debts from original lenders. 

You need to figure out what kind of deal you can make with these agencies. Are you expecting a tax refund? Do you have a large sum handy that could help you settle the debt entirely? Perhaps most importantly, do you know if your finances can handle monthly debt payments? If your situation falls into the latter category, you can verify whether the debt collection agency would be willing to set up a monthly payment plan.

No matter how forcefully they might try to get you to pay in full right away, most debt collection agencies know that it’s not possible. Displaying genuine interest in repaying the debt or taking on a repayment plan can make these agencies much more lenient.

Once you and the agency come to an agreement, make sure that you get it in writing. Never send money to a debt collection agency until you have a written agreement in hand. Otherwise, the agency might claim that it has no knowledge of a prior agreement and demand that you pay up all over again. 

Finally, the CFPB advises not to pay on an old debt without verifying its statute of limitations first. Although a debt’s statute of limitations can’t make it disappear, it can protect you from being successfully sued over that debt. 

Stand up for yourself when dealing with debt collection agencies 

There’s no doubt that having a debt go to collections can be scary. Try to remember, though, that you have more leverage during this process than you might realize. Remain calm in your dealings with any collection agencies, show a good faith effort to repay and stand up for yourself if the agency engages in abusive practices.

This article originally appeared on UpturnCredit.com and was syndicated by MediaFeed.org.

Featured Image Credit: depositphotos.com.

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