Collection Agencies and Debt
You know the drill: the phone rings and (a) you ignore it (b) you check the caller ID and fret about whether to answer or (c) you don’t even keep your phone on anymore because the crush of collection calls it too much to deal with. Collection agencies and the means they employ to retrieve owed monies are a fact of life but that doesn’t mean they can push you around and make your life miserable.
The Federal Fair Debt Collection Practices Act (FDCPA) prohibits the collector from harassing, verbally abusing, misleading and/or lying to you, among many other things. It is important to understand that any dispute over a debt has to go through a series of actions. The actions that you take will determine how much further damage is inflicted on your credit. You can either choose to ignore the phone calls and notices piling up in your mailbox or you can be proactive and start clawing your way back to solid financial standing. If you decide to act responsibly, there are things you should know which will arm you with the knowledge and confidence to resume control of your life.
The first thing you will need to do is to obtain a written copy of the collection agency’s intent to collect the debt. It’s more than likely a collection agency will not do this until you speak with them on the phone. Once you receive notice, you can either dispute the debt or agree that it is valid.
In the case of the former, simply telling the collection agency that you do not believe the debt to be valid will not make it go away. Even if you demand they prove the debt’s validity and insist they stop contacting you, you will still need to clear the matter up with the debt’s originator; various credit-reporting agencies; and, in the case of identity fraud or theft, the proper authorities.
But, if the debt is valid, you are best advised to deal with it now rather than later. Obviously, you can’t pay the entire debt now or else you wouldn’t be in this situation. You will need to sit down and determine how much of your budget you can afford to funnel into paying off the debt and at what intervals. Once you figure this out, you will need to contact the collection agency and work out a payment arrangement.
Many collection firms employ aggressive tactics so it’s in your best interest to protect yourself. If necessary, record your calls and keep a log of what was said. Always inform the person to whom you are speaking of your intent to record the conversation. At this point, if the agent wishes to continue the conversation he or she is implicitly giving you permission to record it. A collection agency will be less likely to strong-arm or push you around if they know they’re being recorded, so make sure you press your advantage by getting their name, company, and telephone number.
Assuming they are cooperating thus far, let them know that you cannot afford to pay the debt’s entire balance in one payment and tell them what dollar amount you can contribute towards paying off the debt. If they agree to this amount, request a written copy of the agreement and keep it for your records. Now you can safely request they stop calling you, but just remember, whatever peace you’ve brokered with the agency is only going to last as long as you keep your end of the bargain. Make sure you make your payments every month, on time as agreed.