Handling Debt Collectors and Agencies

If you’ve come upon hard times and have not been able to keep up with your current debts, your phone is probably ringing at all hours of the day, and your mailbox is full of strongly-worded letters looking for payment. Don’t fret, however – there are options that will help you to curb some of this contact and deal directly with the debts you owe.

Legislators designed the Fair Debt Collection Practices Act just for this reason. Passed into law to protect your rights, this piece of legislation outlines how an agency is allowed to contact you and try to collect a debt.

Some of these requirements include that a debtor can only call you between the hours of 8 a.m. and 9 p.m. They may also not disclose the debt information to third parties like extended family members or your boss. These collection agencies are not allowed to threaten or harass you, and must not continue to contact you via phone if you request them to stop.

A “cease and desist” letter can be sent to any agency you feel has violated the law or harassed you when attempting to collect a debt. If you know the debt is valid, however, you may want to open the lines of communication to deal with it and find some way to pay it off. Your credit score will thank you in the end, and this is the first step in addressing your debt management plan.

You may have the option to settle the debt for less than you actually owe, or negotiate a lower rate to save money in the long-term. Another option may be to seek the services of a credit counseling or debt consolidation company.

The advantage to actually dealing with the annoying collectors is that they will stop contacting you as long as you hold up your end of the deal. However, if you don’t follow through, the calls will begin again, no doubt.

When dealing with the companies, keep a personal log of all calls made and received, the person you spoke to, and what was discussed. When an agreement is reached, ask for something in writing from them, and always keep confirmation numbers or receipts from any and all payments you make.

If the collection company doesn’t maintain their side of the agreement, this information can all become legally viable in the court of law. However, if you are honest about your situation and let them know exactly why you’ve fallen behind, they will be more likely to create a payoff plan that actually works for you.

During negotiations, don’t forget the effect the debt has and will have on your credit report; negative information can stay on your personal report for up to seven years, so ask that the company immediately report any payments you make. If you settle the debt, your report will most likely state this, but will still show that it has been paid. Of course, if you don’t want to handle these negotiations yourself, you may want to retain the services of a credit counseling service to manage any and all debt you owe.