Debt Collectors Are Calling- What to do?

Note:I am a debt collector. This communication is for informational purposes only and should not be considered legal advice. For legal questions or concerns, please consult a qualified attorney. Nothing I say is intended to substitute for professional legal counsel.

As a former insider in the debt collection industry with over 20 years of experience, I've seen countless consumers stumble when first confronted with a delinquent debt.

Today, I want to share some crucial advice for those of you who've just received that dreaded first contact from a collection agency, whether it's a validation notice in the mail or a phone call.

First and foremost, don't panic. Getting contacted by a debt collector can be intimidating, but it's important to approach the situation calmly and strategically. Here's what you need to do:

Don’t Ignore The Contact

It might be tempting to toss that letter in the trash or hang up on the collector, but this is a mistake. Ignoring the debt won't make it go away and could lead to more aggressive collection efforts or even legal action. Instead, gather your courage and face the situation head-on.

Verify The Debt

When you receive a validation notice or during that first call, your primary task is to verify that the debt is indeed yours and that the amount is correct. By law, debt collectors must provide you with certain information about the debt, including:

- The name of the original creditor and current creditor

- The amount owed, properly itemized based on the guidance of a regulation called

Regulation F. (More on this regulation in future articles.)

- Your right to dispute the debt within 30 days

If you don't receive this information in writing, request it immediately. Don't make any payments or admit to owing the debt until you've verified its accuracy.

Know Your Rights

Familiarize yourself with the Fair Debt Collection Practices Act (FDCPA). This federal law protects you from unfair or abusive collection practices. For instance, collectors can't call you before 8 a.m. or after 9 p.m., and they must stop contacting you if you request it in writing.

Keep Detailed Records

Start a file for this debt immediately. Keep copies of all correspondence, make notes of phone conversations (including dates, times, and the name of the person you spoke with), and save any voicemails.

This documentation can be crucial if you need to dispute the debt or if the collector violates your rights.

Consider Your Options

Once you've verified the debt, consider your options:

- Pay in full if you can afford it, if you want to get rid of the negative impact of the debt faster.

- Negotiate a settlement for less than the full amount.

- Set up a payment plan.

- Explore debt consolidation or credit counseling(non-profit companies only)

Remember, debt collectors often buy debts for pennies on the dollar, so there's usually room for negotiation.

Be Cautious About What You Say

In your initial conversations, be careful not to admit liability or make promises you can't keep. Stick to gathering information and verifying the debt. If you need time to review your finances or consult with a professional, say so.

Check The Statute Of Limitations

Find out the statute of limitations for debt collection in your state. If the debt is older than this time limit, the collector may not be able to sue you to collect.

Be aware that making a payment or acknowledging the debt in writing can restart this clock in some cases

Consider Seeking Professional Help

If you're overwhelmed or unsure about how to proceed, consider consulting with a credit counselor or an attorney who specializes in debt collection defense.

They can provide personalized advice and potentially negotiate on your behalf.

Don't Be Pressured

Debt collectors may try to create a sense of urgency, but remember that you have the right to take the time you need to verify the debt and consider your options.

Don't let anyone pressure you into making payments you can't afford or agreeing to terms you're not comfortable with.

Stay Proactive

If you're struggling with multiple debts, take this as a wake-up call to address your overall financial situation. Consider creating a budget, exploring debt consolidation options, or seeking credit counseling to get back on track.

Remember always use a non-profit debt counseling company and not a private debt relief companies.

Also, being contacted by a debt collector doesn't make you a bad person. Financial difficulties can happen to anyone.

By staying informed, assertive, and proactive, you can navigate this challenging situation and work towards resolving your debt in a way that works for you.