Managing debt can be hard enough, let alone having debt collectors constantly calling and reminding you.
According to the National Consumer Law Center, it is estimated that debt collectors contact individuals over a billion times per year. That’s a ridiculous amount: over 2 million a day!
If you have accumulated debt and are looking to get it under control, keep reading this guide to learn how to deal with debt collection and finally breakeven.
Dealing With Debt Collection
Debt can happen for several reasons:
- Education loans
- Medical expenses
- Credit cards
- Auto loans
- Mortgages
Things happen that are out of our control sometimes, and our only choice is borrowing money. Many younger people are just starting adulthood with massive amounts of debt, thanks to college tuition prices. That’s all fine, but how will you work your way out of debt?
Dealing with debt collectors is never fun — they are persistent and will keep calling until they speak with you. Many people’s first instinct is to ignore them and let the phone ring, but that may do more harm than good.
Steps to Handling Debt Collectors
If your phone is ringing off the hook with debt collectors consider following these steps:
Pick up the phone – It may seem counterintuitive for you to answer the phone when a debt collector is calling. However, avoiding them can have negative consequences, such as on your credit score. Even worse, they can sue you for the balance owed.
Verify the information – Verifying the balance due, how long the debt has been owed, and to whom it is owed can help clear up any confusion and make sure the debt is yours. It’s essential to understand the debt collection statute of limitations, which states a maximum amount of time that the accusing party has to file a legal proceeding.
Request to be contacted by writing – As debt collectors contact you, they’re obligated to provide you with certain information including:
- The name of the creditor
- The balance due
If they don’t provide you with this information, they’re obligated to send it within five days of the first contact. Try to get everything in writing. This way, if they try to go back on their saying, you will have proof. For added security, consider recording phone calls as well.
Protect your personal information – Scammers are all over, they will try to rip you off no matter what the cost. The same holds true with debt management and collections. It is vital not to give away personal information over the phone.
Some scammers will request bank account information or check to steal your bank information. Consider using a money order instead to avoid putting your bank account information out there.
Ask for a settlement – Not all debt collectors will negotiate with you, but its worth a try. Asking to settle your outstanding balance can sometimes help you avoid paying the full amount.
Ask to see if they would be willing to work with you and allow you to pay a portion. Depending on the form of debt you owe, the debt collecting agency may be willing to work with you.
Consider a cash loan – if you need help paying your debt down, consider taking out a cash loan. Applying for an online cash loan is quick and easy, allowing you to take control of your finances.
Avoiding Debt Collector Scams
Debt collection scams are becoming a massive problem as scammers are looking to steal banking information as well as other personal information. Scammers can also make up debt and convince you that you owe it. The best way to avoid these types of scams is by knowing what to look for.
Not Providing Information
If the debt collector is not providing the information you are looking for, this is a major red flag. There is certain information they are required to provide for you, including the creditor’s name and amount owed.
Making Threats
Making threats is a common scare tactic used by fake debt collectors. They may threaten you with jail time or will exploit your situation to friends and family.
Be advised that debt collectors can sue you if you legitimately do owe money to them. Though, they are not typically allowed to contact people close to you unless it is to try to find your location.
Asking for Personal Information
You should always be skeptical when someone over the phone is asking for personal information, especially when it comes to debt collectors. Never provide sensitive information like:
- Banking information
- Or social security
if the collector proves to be legitimate, request the information in writing.
Know Your Rights
It is vital to know your rights when it comes to debt collection. The Fair Debt Collection Practices Act outlines what is illegal.
According to the act, collectors cannot:
- Harass you
- Call you outside of 8 AM to 9 PM
- Contact friends and/or relatives unless it is for contact information
- Call you at work after being told your employer doesn’t allow for that
- Lie about the amount owed
- Threaten to arrest
- Give false information
- Refuse to give a callback number
If you happen to come across any of these, it is most likely a scammer trying to steal your information. It is best to ask for the information in writing and verify the information they are relaying to you.
Above all else, if you are being contacted about debt, make sure you don’t actually owe before blowing it off. Because if you do, you risk being sued, and your credit rating can suffer as a result. Keep in mind the debt collection laws when being contacted, and you will have a much better chance of avoiding scams.
Are You in Need of Debt Relief?
If possible, it’s best to stay ahead of debt and pay it off as quickly as possible. It’s understandable that things happen, and you may not be able to pay your bills. Being prepared for these situations can help lessen stress and allow you to move forward knowing your rights.
If you are being contacted by a debt collection agency and need a cash loan, contact us today, and we can help.
