Dealing With Debt Collectors

Dealing with debt collectors? You're not the only one! Bill collection problems have even made it to the big screen, in the movie Confessions of a Shopaholic, where Rebecca Bloomwood dodges collection agencies, while dishing out advice for a financial magazine.

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Too many financially-stressed consumers make their situations worse because they do not know how to respond when a debt collector calls them. Here are some things you should never do when dealing with debt collectors:

• Admit that you owe the debt the debt collector wants to collect from them or agree to pay the debt without first getting written proof from the debt collector that you actually owe it. Federal law entitles consumers to this proof if you ask for it.

• Acknowledge that you owe a debt or offer to make a payment on the debt without first checking to find out if the statute of limitations on that debt has run out. The statute of limitations represents the period of time during which a debt collector can sue a consumer to collect a debt. (This period varies by state and by type of debt.) If the statute of limitations has expired and you let the debt collector know that you agree that you owe the money or promise to pay all or a portion of the debt, you will start the statute of limitations running all over again, which means that you can be sued for the money they owe.

• Give the debt collector any information about your bank accounts, employment situation, assets, or any other information that the collector might be able to use to collect the money they owe. Consumers are not legally obligated to provide a debt collector with any information about themselves.

• Engage in conversation with a debt collector, even if the collector seems really friendly. Some debt collectors act friendly in order to try to get consumers to tell them things that will make it easier for the debt collectors to collect their money.

• Offer to pay any money to a debt collector unless you are sure that they can afford to pay it and unless paying the money won't jeopardize your ability to pay your rent or mortgage, keep your utilities on, feed your family, and meet other essential financial obligations.

• Pay a debt collector with cash, a money order, a credit card or a personal check. Also, you should never let a debt collector withdraw the money you owe directly from your bank accounts. Paying with a bank certified check or via Western Union are safer options.

• Fail to maintain good records about your interactions with a debt collector -- any letters or notices you receive from the collector; copies of letters you send to the collector; canceled checks, account statements and receipts related to the debt the collector wants to collect; summaries of any phone conversations you have with a debt collector, including any promises you or the collector may make. If a debt collector violates your debt collection rights, good records can make the difference between consumers having the basis for a winning lawsuit and not having enough information to bring a lawsuit.

Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights provides more information about dealing with debt collectors.

Posted March 2009
Updated July 2009

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