There is every possibility that your consumer debt can get out of hand which may lead to dealing with debt collectors. Debt collection tactics are annoying and tough to handle. Therefore, it is important to know how to deal with debt collectors. This way you can assert your rights and choose the best way of debt management.
How to Deal With Debt Collectors
Here are some tips on how to deal with debt collectors if you ever have to face them.
Do Not Pay at First Contact
It is a scary situation when debt collectors contact you about your debt. However, make sure you don’t jump at the payment on the first contact itself. Take time to understand the terms and think through your options. Avoid giving out any payment information to the debt collectors. Make sure you ask for information on the debt and say you’ll call back to discuss it later.
Gather the Facts
When the original creditor sells a debt to a third party, many sold debts have errors about the amount owed or even who owns it. An article on NerdWallet (“How to Deal With Debt Collectors in 3 Steps”) suggests that you take the following precautions.
- Request a validation letter from the debt collector if you don’t receive one within five business days of the first contact. It should include details on the debt, the collection company and how to challenge the debt.
- Gather your own records on the debt, if it’s yours, including information on the original creditor and your history of payments
- Keep good records of communication with the debt collector and any payments previously made. You may want to use certified mail for the best documentation.
Know Your Rights
According to the Fair Debt Collection Practices Act, you have the following rights.
- Communication: You can specify how and when debt collectors can contact you — and that they cease communication altogether. Debt collectors are prohibited from using profane language or threatening violence.
- Honesty: Debt collectors cannot mislead you about who they are, how much money you owe or the legal repercussions of not paying your debt — for instance, by threatening arrest.
- Challenging the debt: You have a right to dispute the debt. If you challenge the debt within 30 days of the first contact, the collector cannot ask for payment until the dispute is settled. After 30 days you can still challenge the debt, but the collector can seek payment while the dispute is being investigated.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.