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If you are in a situation in which you have fallen behind on payments you shouldn’t be surprised when you start receiving harassing phone calls from debt collectors. You may also find yourself in a situation where you receive a call from a debt collector over an old debt that you thought had been paid, discharged or had aged beyond the statute of limitations. That call may surprise you.
In either case, you should be armed with the information, steps and tactics that will protect your rights while getting you to a positive resolution. More alarmingly, phony debt collectors are proliferating with the sole intent of stealing your identity. So, it is essential to know what to ask, what to say and what you should and shouldn’t do when confronted by a debt collector.
Steps to Take When You Owe the Debt
- Do not ignore the calls. They have every right to contact you until you tell them to stop. Just know that, if you ignore the calls or tell them to stop, they can still take legal action.
- Be prepared to negotiate. Know what you owe and tell them what you would be willing to pay. You can even negotiate a balance payoff in some cases, meaning you can have the debt amount reduced.
- Be ready to complain. If the debt collector uses any abusive tactics – threats, harassment, or ignores your request to stop calling – let them know they will be reported to the BBB, the FTC and your state, and then report them.
- Tell them to stop calling you. If you are unable to come to a resolution, or you simply don’t want to receive any more calls, they are bound by law to stop calling you if you request they do so. Be sure to follow up your verbal request with a letter.
- Don’t ignore threats of legal action. Debt collectors can pursue legal recourse. Many don’t because there’s little cost justification. But for those willing to pursue it, be prepared.
- Contact your lender. If you can’t stand the thought of paying a debt collector, contact your original lender. They may be willing to negotiate balance reduction or more favorable payment terms.
Steps to Take When You Don’t Owe the Debt
Don’t ignore the calls. Even if you don’t think you owe the debt, they will continue to call until you tell them to stop. Plus, they can pursue legal action as long as you have not shown the debt isn’t real.
Don’t make any payments. Fairly obvious, if you don’t believe the debt is real. If you make a payment then you legitimatize the debt.
Verify the debt. Ask them for verification of the debt. They must be able to provide you with documentation of the debt. You can then contact your lender, your bank and anyone else involved in the debt to verify that payment was made and the debt has been cleared. You will also need to write to the credit bureaus to explain any inaccuracies or misreported debts to have them cleared.
Get your identity theft radar up. It may be that the debt collector is a phony and is instigating a debt claim in order to collect personal information. Always ask for identification and documentation of the debt. Report any suspicious activities.
What if they Harass Family and Friends?
Technically, there is nothing stopping a debt collector from contacting your family, friends or neighbors, but the law (Fair Debt Collection Practices Act) is very explicit that they can only ask for verification of contact information. They are not allowed to discuss any aspect of the debt or the collection.
Your family or friends are not obligated to tell them or verify anything. And, if any contacted parties tell the collector to stop calling, the calls must stop. The more unscrupulous collectors will stretch the limits of this law to try to intimidate or humiliate you into paying the debt. Any violation should be reported and you might want to have a consumer lawyer fire off a letter threatening to sue them.
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