What Debt Collectors Won’t Tell You
Anyone who has defaulted on a credit card or other debt has had to deal with harassing phone calls from debt collectors. Despite laws preventing it, these collectors will use intimidation, negative sales tactics and outright lies to get you to cough up money to them. Once you realize what is real and what isn’t, and what your rights are, it makes the process far less scary.
Here are a few realities taken from a Readers Digest article by Michelle Crouch:
- Debt collectors get paid bonuses when they reach certain goals
- They have pre-authorization to settle for sometimes as little as 15-20% of the total debt
- Statutes of limitations may legally prevent them from suing you to collect on your debt, in which case you aren’t going to want to pay them anything.
- There are legal ways of getting them to stop contacting you–as simple as writing a letter. The Fair Debt Collection Practices Act (FDCPA) provides hundreds of pages of rights to debtors
- If a debt collector threatens to have you arrested, or calls before 8 a.m. or after 9 p.m., you can report them to your state attorney general’s office (naag.org) or the Federal Trade Commission (ftc.gov). These are violations of the Fair Debt Collection Practices Act (fdcpa). I have clients tell me all the time that they have been threatened with jail time by collectors. ALWAYS take down the name, phone number, time, date, etc. of the call/caller (the name will likely be fake, but take down as much information as possible) and report them.
- Don’t ask for a manager–they won’t help you. You’re better off just calling back and getting a different collector on the phone.
- If you ask a collector not to call you at work, they must by law stop.
- They’re not interested in your stories about why you’re unable to pay. All explanations of this nature are summed up by a simple notation on their computer: “HLS” (hard luck story). You’re simply wasting your time by going through all of that.
Take Control of Your Situation
All of these items set forth above show the need to be proactive in dealing not just with your debt problems, but with life in general. Don’t ever feel powerless. You always have options. Know your rights.
As far as debt collection goes, understand that these are people getting paid to scare you–scare you into paying them. However, there are federal laws restricting what they can say and how they can say it. If they cross the line, pin them against the wall.
Talk to a bankruptcy attorney to examine your options.
Read up on the FDCPA and know your rights as far as what a debt collector can and cannot do.
Be proactive.
Learn and examine your settlement options. Seek settlement if it works best for you. Take another path if it doesn’t, but always understand the benefits and consequences of any decision. Use attorneys and other available resources to help you take control of your situation and make those tough but necessary decisions.
It is important to not let fear take control of your decision making processes. Learn your options, analyze the costs and benefits, and then make your decision. In order to do this, you need information. You can gain information from many sources, including attorneys. Bankruptcy is one option to consider, but certainly not the only one. Consulting with an attorney is often a very illuminating experience. You may be pleasantly surprised at what you will learn.
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