Calls from debt collectors can be overwhelming and intimidating. But learning some do's and don'ts about handling debt collector calls—and understanding your rights when it comes to debt collection agencies—can ease your anxiety.
More importantly, by knowing what to do and say when a debt collector calls, you can avoid making a mistake that could put you at legal or financial risk.
Here are some things that you should do when dealing with collection calls or speaking with collection agents.
A collections log is a written record that you make of the date and time that a collector calls, the employee that you speak with, and what the collector says to you. Your log doesn't have to be anything fancy—writing it on a notepad or spare piece of paper is fine, or keeping a log using your computer or phone works too.
A collections log will help you straighten out who is calling you from where, and what debts each collector is calling about. It will also help you keep track of how often a certain creditor calls and document inconsistencies in what collectors say to you from one call to the next.
Under the federal Fair Debt Collection Practices Act (FDCPA), if you request that a debt collector stop contacting you completely, it must do so (with a few exceptions). Your request must be in writing.
Think carefully before you do this. If you want to keep tabs on the status of the debt or open up the lines of communication with the collector in order to negotiate a settlement, this might not be in your best interest. If you request that the collector cease communication with you, it can't contact you except to serve you with a lawsuit. (To learn more, see Should I Tell a Debt Collector to Stop Contacting Me?)
If you feel the debt isn't legitimate, or that you don't owe it, you should tell the collector why. Often, collectors aren't even aware that your debt might be uncollectable. Many times, if your reason is valid, collectors will voluntarily cease collection on the debt, as their resources are better used on consumers who don't have a valid objection to paying the money.
If you act quickly, you can request in writing that the debt collector validate the debt (provide certain information about it) and stop collection activities while it does so. But consumer lawyers report that debt collectors usually don't provide much in the way of information in response to these requests. (To learn more, see Debt Validation.)
There is nothing that legally obligates a collector to stop trying to collect just because you can't pay. But telling collectors that you can’t pay, and giving them a short explanation of your financial difficulties, might lead them to move on to other consumers. It might also prevent your file from being referred to litigation.
Your instinct might be to hide from collectors by changing your phone number or refusing to provide your address. But hiding your whereabouts won't prevent a collector from trying to collect—it just will mean they might send letters and make calls to others that they think might know where you are, or who they think are you.
Making matters worse, collectors who don't have a consumer's address also have a lot more legal leeway in contacting employers or friends to ask about your address. If the collector does have your current address, then contacting employers or friends is illegal.
The FDCPA prohibits debt collectors from using abusive or harassing tactics. It also sets forth limits on when and where the collector can contact you, prohibits collectors from communicating with others about your debt (with a few exceptions), and more.
Here's what not to do when dealing with debt collectors.
While some collectors might say they want information about your income in order to qualify you for a lower payment amount, you should never provide your personal financial information.
This means you should never:
This information might be used to collect from you if the creditor or collector gets a judgment against you.
You can provide basic information about your income or financial troubles. As a general rule, if information could be used by an identity thief, it shouldn't be given to a collection agency.
Often a consumer will voluntarily make a very small payment to a collector, and not pursuant to a settlement agreement. You might make the payment to show "good faith" or because you believe that doing so will keep you from being sued or avoid ruining your credit.
But what this small payment can do is extend the statute of limitations (the time limit that a debt collector can sue you for the debt). This is because in most states, the statute of limitations clock starts ticking from the date you made the last payment. Every new payment, no matter how small, restarts the statute of limitation clock.
Even if it’s clear you owe the money, you should refrain from making any statements such as "I know I owe this and will pay you as soon as I can" or "I can start paying you next month." Your acknowledgment of the obligation might revive the statute of limitations. Any promise you make to make a payment could be interpreted as a separate contract, renewing the statute of limitations for the debt.
Using profanity, screaming, or getting hostile, won't help you. If your call records are ever reviewed by the collection agency, or ever needed for a court action, it will hurt you if you're the one who's abusive and not the collector.
If you need help dealing with debt collectors—or if you're facing a collections lawsuit—consider talking to an attorney to find out what to do in your particular circumstances.