How to Deal With Debt Collectors
Don't ignore debt collectors when they call. The rules that debt collectors must follow have changed recently, so don't get caught by surprise. In fact, an increasing number of people who don't owe money are being harassed by collection agencies erroneously. Read on for some helpful ways to deal with this.
- Difficulty:
- Moderately Challenging
Instructions
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If you are being harassed by creditors for money that you don't owe, you can write a "Cease Communications" letter to the collection agency. In this letter you will explain that you are not the debtor and demand that the firm cease all collection efforts against you. Once this letter is filed, the agency cannot legally contact you again under current law.
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If you owe debt that is now outside the statute of limitations, again a "Cease Communications" letter will work that points out the statute. If the creditor sues you, then you can show up in court and state that the statute of limitations has expired on this debt. However, you may have to repeat this exercise every time your debt is sold to a new collector. Also be sure to consult with an attorney about the statute so that you are sure of yourself in this matter.
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If it is your debt and it's within the statute of limitations, and you can't pay it, it is vital that you stay in touch with your creditors and answer their calls--but don't make promises that you can't keep. Stay in touch, but don't say too much. If you really can't pay anything at the moment, you can say that to them, but don't elaborate; just state why you are unable to pay now and that you'll get back with them shortly.
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Whatever you do, don't tap into your retirement funds or cash inside any kind of annuity or insurance policy. They are secured from creditors and cannot be legally accessed by them under any circumstances.
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If you are able to pay some of your debt, negotiating a settlement for old debt may be your best option. It's a good idea to name a figure below what you are actually able to pay and negotiate from there. This applies to both monthly payments and lump-sum balances. Also be sure to get a letter confirming your debt is paid once you send in your money.
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Finally, if a debt collector is verbally abusive or threatens you with arrest, you need to ask to speak to a supervisor. If all else fails, consult with a Consumer Law Attorney about your options, which can conceiveably include suing the creditor.
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Comments
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slongo50
Nov 05, 2009
If a debt collector does in fact agree to a settlement, I strongly recommend you get it in writing before paying. Have them send the offer via fax or U.S. Mail and be sure it's on their company's letterhead. Finally, make sure the written offer includes the name and accouont number of the original creditor. -
jtltexan
Aug 28, 2009
When making a settlement for a lessor amount than the original debt, make sure that you keep all records pertaining to the settlement arrangements that you have made. The settled debt may re-surface several years down the road in what is called a "zombie" or "junk" debt. It is important to have the documentation associated with the settlement payment if this happens so that you can deal with the "zombie" or "junk" debt collectors.
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dtaylor77
Feb 05, 2009
good tips
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Mark P Cussen, CFP, CMFC
Dec 16, 2008
Tell what you think is incorrect in my article. I'd like to know. But I don't appreciate the tone of your message; it sounds very unprofessional.
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Mark P Cussen, CFP, CMFC
Dec 16, 2008
Tell what you think is incorrect in my article. I'd like to know. But I don't appreciate the tone of your message; it sounds very unprofessional.
