Steps for working with a debt collector
Working with debt collectors can be frustrating and difficult. Learn some basic steps you can take to protect yourself from harassment.
Working with debt collectors is not fun, but it may be necessary in some circumstances. What are some methods for handling harassing debt collectors in a productive way? The National Consumer Law Center gives tips to protect ourselves from general harassment. It is important not to be pressured into making unreasonable decisions. The majority of people who default on their creditors do so because of a loss of job, an illness or a divorce. Creditors fully understand the risks they take when they lend to people and set their interest rates accordingly. When you are dealing with debt collectors keep in focus the bills you need to pay for your family’s survival. Make a priority list of bills to pay with the money you do have and stick to it until your income improves. Consumers have rights when a debt collection agency or attorney is trying to collect a debt for a company. The federal law regulating debt collection, the Fair Debt Collection Practices Act, provides consumers various rights against collectors.
There are several actions one can take when dealing with collectors. A few simple steps can ease the pressure a debt collector places on you. The first step is to contact the creditor when you begin to have problems paying and before they send you to a collection agency. Explain to the creditor why you are not paying and when you plan to make a payment. Be clear that you intend to pay as soon as you care able to. Ask them not to send you to a collection agency.
If you are sent to a harassing collection agency, try writing a cease letter to the collection agency. The collection agency is required to stop collection activities after they receive a written request to stop. Explain why you cannot pay at this time and what your financial plans are in the future. Send the letter return receipt requested and keep a copy for your records. If the debt collector continues to harass you, document the tactics including the time of day and harassing or obscene language. Write a second letter similar to the first and include a complaint about these tactics. If the harassment continues, consider filing a complaint with the consumer division of the Attorney General’s office.
Make sure you have reviewed what the collection agency says you owe. Review any correspondence for errors in the account number, the amount due, or billing of the consumer instead of the insurance company. If you find any errors, contact the collection agency with a correction letter requesting a correction in the mistake. A collection agency is required to notify you of your right to dispute the debt the first time they communicate with you or within five days of their first communication. If you dispute the debt within thirty days they are required to stop collection activities while they investigate.
Michigan State University Extension says if you find yourself in a situation where you are facing debt collectors, remember to act quickly and do not try to hide from them. You are more likely to receive a positive outcome from your proactive approach.