As we go through life it is difficult not to incur debt. Whether it is from credit card bills, student loans, medical bills, or other financial obligations, debt can be a serious obstacle for consumers.
The general consensus among debt counselors, debt collectors, and state regulators warns that ignoring debt collection letters, phone calls, or court documents is the wrong way to address scary debt situations. When in debt, it is best to confront the fear and deal with the circumstances. Otherwise, dealing with collection agencies will only get worse.
The best option is to avoid debt collectors altogether. If you see financial trouble coming, try to form an agreement with the original creditor and work out a reasonable payment plan before the debt is sold to a third-party debt collector.
Sometimes that’s just not possible or it may be too late. Here are some tips to stay sane when dealing with debt collection agencies:
1. Educate yourself about your rights
Learn about your consumer rights and the Fair Debt Collections Practices Act. You can visit your state’s Attorney General’s Office website for information about debt collection laws. The Consumer Financial Protection Bureau (CFPB) also offers a wealth of information about debt collection practices and what to do when dealing with harassing debt collectors.
2. Don’t ignore letters or phone calls about debts or court notices about debt lawsuits
Open lines of communication are best in these types of situations. You should actively write to the collector and get a written verification of the debt to make sure the debt belongs to you and the information is accurate. If you receive a court notice about a debt judgment against you, do NOT ignore this! If you do not respond to the notice or show up in court, the debt collector will win in default.
3. Find a debt collection lawyer
If you are served with a notice of a lawsuit, find an attorney who specializes in consumer law to evaluate whether your consumer rights have been violated. The National Association of Consumer Advocates (NACA) provides a database of consumer lawyers across the country.
4. Keep copies of everything
Keeping complete records for all of your open accounts is the best way to track progress and prove accuracy when necessary.
5. Safeguard your bank accounts
Debt collectors can file suit against a consumer for not making payments on a debt. Sometimes collectors will freeze savings or checking accounts, which can be very problematic for families on a budget. Experts suggest keeping separate bank accounts for funds, such as Social Security or disability checks which cannot be used as a source of court-ordered debt payments. Debt collection can also be halted if you have declared bankruptcy.
6. Be smart about payment methods
You may want to avoid giving debt collectors information about banking accounts and routing numbers. If you use money orders or another third-party payment service, you will have proof of payment and avoid providing personal account information. You should also avoid allowing debt collectors to make direct electronic or automated withdrawals from your bank accounts.
7. Record conversations, when permitted
It’s a good idea to record conversations to document any threatening or abusive language being used by collectors. Experts say it may be a good idea to let the collector know you are recording the conversation. Although, this may deter them from overstepping bounds.
8. Get everything in writing!
Any agreements for making debt collection payments should be confirmed in writing and signed by a representative of the debt collection agency before sending in any payments. This will help avoid misunderstandings.
9. Certify your mail
Sending documents and correspondence via certified mail provides some security. You can also request a return receipt for proof that your letter was received.
10. Manage your debt
If you need help, find an accredited counseling agency, such as the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. The Federal Trade Commission advises against using a for-profit credit repair company.
If you are seeking a consumer lawyer to help deal with a debt collector issue, contact us for a FREE case review today! (888) 668-1225(888) 668-1225