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Credit Wise
(featured column)
Fight
for Your Rights with Debt Collectors
by Jennifer
Wallis
Hopefully,
you’ll never have to deal with the aggressive segment of the population known
as debt collectors. But if you do, it’s important to understand your rights
and exactly what they can and can’t do to you. Unfortunately, when I moved 3
years ago, I had to get a new phone number. When I was given my new one, I
quickly deduced that the previous owner of the phone number, John Brown (name
has been changed) had apparently dumped that phone number to avoid debt
collectors. More...
We got collection calls all day long! When
they called, I would tell the collectors very politely that John Brown no longer
had our phone number and to please remove it from their system. Over time, the
calls got less and less and finally stopped. Until two weeks ago, that is. I
would come home to 3 or 4 messages and hang ups on our answering machine every
day from the same number. The phone would ring every evening at precisely the
same time. Each evening, I politely explained that they had the wrong number and
to please remove it from their system. Each time, the collector apologized and
assured me that we wouldn’t get anymore calls. Unfortunately, the calls
continued for an additional week no matter how many times I asked them to stop.
I’m not proud of this fact but I was finally so frustrated that I posted the
collection agency’s phone number on a social network site and asked all of my
friends to call to ask for John Brown. Somehow, they got the message and
finally, the calls stopped.
Even though I am very fortunate that the
collection calls weren’t for me, they were still persistent and annoying. It
got me thinking back to the days when I had my own financial troubles in
college. When you’re already stressed over financial issues, frequent
collection calls just compound that feeling of hopelessness every time the phone
rings. I guess that’s part of the design. They call so many times that you
will do just about anything to get them to stop. They want to get paid and
don’t care how you get their money. Pay them and they’ll go away.
If you find yourself in the unfortunate
situation to deal with collectors, it’s important to know your rights. I used
the wonderful resource guide "Surviving Debt" by the
National
Consumer
Law
Center
as my source for this information. Here are a few key facts to know about
dealing with collection calls.
 | Don’t
let them mess up your plan to pay by priority
:
When you’re struggling for money, it is critical to make a
list of your creditors and to rank them by priority. Pay as many as you can
but always pay the most important ones first. The highest priority should be
the debt with the worst consequences. For example, if you don’t pay your
rent or mortgage, you could become homeless so that debt goes to the top of
the list. Next, if you don’t pay your car payment, it will get repossessed
and you won’t be able to drive to work. Even though medical and credit
card collectors may be much more aggressive, they go to the bottom of the
list. Don’t be scared into paying them before higher priority items.
| Don’t
make promises you can’t keep
:
It may be tempting when they call to say you’ll send a payment
on your next payday. However, if you can’t afford to do that, don’t make
that promise. Just be honest. Say something like, “I would like to pay you
but I have to make my house payment. I’m not sure when I can pay you but I
will do my best.” They won’t like that answer and they will probably try
to nail you to a certain payment date. Just don’t make promises you
can’t keep. I have been told by mortgage company collectors that when
clients make a promise to pay, they put s special note in their computer.
When clients don’t keep that promise, they note “broken promise to
pay”. When there’s a long list of broken promises to pay, it makes them
less likely to accept payment arrangements with you in the future. They just
can’t be sure you’ll keep your word.
| As
soon as you know you’re in trouble, call your creditors
:
If you just stop paying your bills, creditors assume the worst-
that you don’t want to pay. They will be much more understanding if you
contact them at the first sign of trouble. Let them know you are
experiencing trouble and ask for help.
| You
have a right to tell them when and where not to call you
:
According to the Fair Debt Collections Practices Act (FDCPA)
third party collectors (a collection agency hired by the original creditor)
must stop contacting you if you request it. Many original creditors will
also respect your wishes if you send such a letter to them. If you ask them
not to call you at work, they have to stop calling. If you ask to be
contacted by mail only (or not at all) they have to oblige. To be safe, I
suggest sending a certified letter to your creditor asking telling them how
or if you would like to be contacted. Once they receive it, they have to
respect your wishes. If they don’t, they can be sued by you and fined by
the Federal Trade Commission.
| Know
what they can’t do to you
:
First, they can’t confiscate your house, car, bank account or
any other household item for an unsecured debt such as a medical bill, small
loan or credit card. They are not allowed to reveal that they are collecting
a debt to any family member, neighbor, friends or employer. They are also
only allowed to contact you between the hours of 8
:
00 am and 9
:
00 pm. They are also not allowed to use insulting or obscene language. They
also can’t have you arrested for not paying your bills (unless it is child
support). They also can’t sue you past the Statute of Limitations for your
state.
| Know
what they can do to you
:
They are allowed to call you to collect their debt unless you
tell them to stop. Some creditors will file a lawsuit against you. You will
have 30 days to respond and have a right to go to court to defend yourself.
If they win and receive a judgment, some states may allow them to garnish
25% of your take home pay. They can report any outstanding debts for seven
years to the credit bureau.
| Get
help
:
If you are in a position to repay your debts but don’t feel
comfortable negotiating payment arrangements on your own, contact your local
National Foundation for Credit Counseling www.nfcc.org
non-profit credit counseling agency. They will help you work out a repayment
plan and will even field collection calls for you, which will stop once the
creditor receives regular payments. They can also advise you of your rights.
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For all of us, the ideal situation is to
avoid financial problems. Unfortunately, life doesn’t always make that
possible. If you do find yourself in trouble, the bottom line is that you can
only do the best you can do. Don’t make things worse by allowing an aggressive
collector to scare you. Knowing your rights is the best defense of all.
* * *
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* * *
Copyright
© 2009 by Jennifer Wallis. All rights reserved. Want more
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