Most of us spend the majority of our lives paying bills. Every month, groceries, rent, utilities, and other expenses snatch up our hard-earned cash. If you have a fixed rate mortgage, you can expect to be paying off the loan for 15 or even 30 years. With so many bills over so many years, it’s easy to slip up and fall behind on a payment.
Over 8,000 debt collection agencies in the United States dedicate countless hours to finding debtors and retrieving the money they owe. Debt collectors use a variety of tactics communicate with debtors, but most commonly, collectors contact debtors through phone calls, sometimes making several phone calls a day.
Receiving a call (or many calls) from a debt collector can be frustrating and embarrassing. If you’re in a predicament with a debt collector, you may feel like changing your number or throwing your phone out the window on the interstate.
Don’t chuck your cell, and instead fix the situation fast to protect your financial standing. Try the following three tips to handle collections calls and manage debt quickly.
1. Know What Debt Collectors Can and Can’t Do
While debt collectors do have the legal right to contact you and request payment on a creditor’s behalf, there are many collections behaviors that are outlawed by the debt collection act. Debt collectors cannot:
- Contact you before eight in the morning or nine at night
- Use abusive language
- Harass you with endless repeated calls, threats of violence, or by publishing your personal information
- Pursue you for money you don’t owe
- Come to your place of work
- Claim to be an attorney or member of law enforcement
- Threaten to sue unless they truly intend to take legal action
If the debt collector breaks any of the above laws, tell the person you’re aware of your rights and believe that the caller is in violation. Should the collector not stop the behavior, consider taking legal action to prevent further calls.
2. Gather the Facts Before Agreeing to Pay Any Amount
If the debt collector is staying within legal limits, don’t automatically agree to pay whatever amount they request during the initial contact. Instead, take time to ensure that you both have the facts straight. Ask to have proof of the debt sent to you in writing. Keep notes during phone conversations and keep records of all messages you receive. In many cases, debt collectors make mistakes with accounts, and you want to be absolutely certain that you’re paying debt you actually owe, and not someone else’s.
3. Don’t Be Afraid to Negotiate
Finally, don’t be afraid to make deals with the debt collector once you’ve determined the debt is accurate. Bankrate.com recommends asking for a pay-for-deletion deal, where you agree to pay the full amount for a forgotten bill if the collector deletes the collection account from your credit report. Remember to always get deals in writing before sending payment, and to only pay with cashier’s checks so that collectors don’t have access to your bank account information.
Preventing Collections Calls
Obviously, the best way to avoid contact from debt collectors is to avoid debt in the first place. Keep a close watch on your credit cards in particular– it’s easy to slip up when you’re managing multiple accounts with many small payments. FICO recommends keeping your credit utilization ratio under than 30% of your original credit limit to better manage credit card debt. Whenever possible, use cash for purchases, and avoid using more than two credit cards at a time.
Calls from debt collectors can be upsetting, to say the least. However, you have more options than you may think. Know your rights and learn these strategies for handling collections phone calls with defensive shrewdness. With planning and research, you can ensure that your mood and your finances aren’t ruined by pushy debt collectors.