Debt collectors can be a real pain in the rear. They’re relentless, they can be rude, and they can be scamming you!
In this article, we’ll learn what to do when faced with debt collection.
It’s not really important to know how debt collection works, so I’m just going to give you a brief summary.
Wherever your debt originated from, they will get to a point where they’ll no longer “chase” after you for payment. They will sell the debt to a collector. That collector will try to get you to pay, and you might pay some, but whatever is leftover, they’ll sell to the next debt collector, and so on.
Get information about debt
Debt collection agencies have to send you a report, on paper, listing how much you owe and to whom. They have to send it to you within 5 days of speaking to you. Before you exchange any kind of information, have them send you that report.
Odds are, if you don’t get that report, you probably don’t owe the collector for the particular debt they were calling about.
Whatever system you use, whether it’s paper or paperless, keep good records. Especially, anything finance related. If you have documents that show what debts you owe, then you know a call from a collector is a scam.
If you do get a call from a debt collector, take copious notes. When they called, what their name was, to what debt they are referring to, and so forth. If they pursue legal action, having notes and records at your disposal should help your case.
Fight the claim
If you think a debt collector is trying to scam you, write them a letter explaining yourself. You can also write a letter asking them to stop calling you. By law, they need to stop if you ask (see below).
What they can’t do
- Using rude or threatening language
- Continuing to call even after you told them to stop
- Calling before 8 a.m. or after 9 p.m. unless you agree
- Calling you at work if you have asked them to stop
- Talking to anyone but you or your attorney about the debt
- Misrepresenting the amount of your debt
- Falsely claiming to be an attorney or law enforcement
- Falsely claiming to be a credit bureau representative
- Threatening to sue unless they actually plan to take legal action
- Threatening to garnish wages or seize property unless they actually intend to do it
Negotiate your debt
If it turns out the call from a debt collector is legitimate, negotiate with them. Start off the negotiation saying you’ll pay a low percentage of what the debt is. For example, 15%. They’ll inevitably come back with a higher number.
I’d advise you to have a “ceiling” in mind. A number you are unwilling to go above. In the end, they’ll take something rather than taking you to court (which, honestly, they still could).
Share very little
Don’t give out your information. Upon doing research for this post, one source said that it’s okay to give them your address. I guess this can be up to the person on what information they give out, but I’d tell you not to give them anything.
If the debt they are calling about is legitimate, they should have all of the necessary information. They got a hold of you after all, right?
As they say in poker, keep the cards close to your chest.
At some point in your life, hopefully not, you’re going to get a call, email, or text from someone trying to scam you.
In this day and age, a lot of the people that do this are “good”. When I say good, I mean skilled. They know what to say and what tricks to play.
Similarly, if they continue to do something, as to say they continue with a particular schtick, it’s because it works. That’s why that Nigerian Prince tactic still exists. Because people fall for it.
Trust nobody is a pretty dramatic statement. I’d rather use trust, but verify. Another way to look at it is being skeptical. If it sounds fishy or too good to be true, it usually is. Trust your gut.
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My name is Jacob Sensiba and I am a Financial Advisor. My areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. Please feel free to contact me at: firstname.lastname@example.org
Actually…the negotiation piece of this is underrated. A lot of people think they need to pay the full amount – they forget that bill collectors will often settle for a percentage.