Dealing With Debt Collectors

Tips For Dealing With Debt Collectors

Dealing with debt collectors can be a stressful and unpleasant, but there are things you can do to reduce stress and increase your chances of a good debt negotiation or settlement.

If you have defaulted on a loan or have consistently failed to make payments on your credit card debts, most creditors will eventually turn your account over to a debt collection agency. Collection agencies are in business to obtain money owed, and they are usually paid a percentage of the total amount collected. Debt that cannot be collected can result in court action.

It's always best to deal with the agency when you are first contacted. Avoiding debt collectors will only prolong the unpleasant situation and serve to make things worse in the long run.

Debt Settlement Negotiations

The first and most obvious tactic you should consider is to actually pay off the debt, supposing that you can. After all, you contracted the debt, and the creditor is legally entitled to receive payment.

However, if you can demonstrate that you truly are short of funds, you can perhaps negotiate extended monthly payments or come to an agreement for the payment of a reduced amount.

If you come to an agreement and follow up on it, the debt collector will stop calling. Though collectors sometimes display an unpleasant attitude, most are ordinary people with a difficult job to do that's often stressful. Once a working agreement is in place, the debt collection agency will shift their attention to other less-cooperative debtors and let you get on with re-establishing your credit.

Credit Card Debt Negotiations

Negotiating With Debt Collectors

Keep Written Records

Always keep a written record or diary of any calls you make or accept, and the name of person you speak with. Accurately note the date and time of the call and any terms agreed to. Be sure to make a note if you requested that they stop calling you at home and/or at work. If you don't write things down, a week or two later you will likely have forgotten dates and details.

A WRITTEN record is important, and a record of telephone calls can be particularly important if you have successfully negotiated a repayment plan or debt reduction. And if the collector knows that you are keeping accurate notes, he or she will be more careful not to make any statements that are false or out of line.

Never Pay "Cash" To A Debt Collection Agency

Payments to a debt collector should never be in cash -- pay by personal check or money order only. Always make sure you keep a receipt for your payments such as a cancelled check from your bank or a money order receipt. You may need to prove to a court that the proper payments have been made and if so, receipts will be required.

When making payments to collectors, always make sure you have sufficient funds in your bank account. Don't risk an NSF check and NEVER miss a payment. If circumstances prevent you from making a scheduled payment, contact the collection agency at once to explain your situation and make an alternate arrangement. Always be up-front with your contact person. Avoiding the issue will land you in deeper trouble.

Know The Debt Collector Laws

For peace of mind and protection when dealing with debt collectors, you should know the laws or rules by which debt collectors must conduct themselves in your state or province. If the collector knows that you are aware of the debt collector laws, he or she will be more open and careful when dealing with you.

More About Debt Collector Laws

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