Home> Credit Library

DEALING WITH DEBT COLLECTIONS: PROBLEMS AND TIPS

If your experience with a debt collector has been a positive one, good for you-- you are one of the lucky ones. For the majority, their experiences have led them here seeking hope and a way out of the harassment. Yes, if you owe a debt, they have the right to collect that debt but at what cost? Many consumers have suffered health and emotional problems after dealing with the likes of some debt collectors who find pure pleasure in the chase of collecting a debt. It doesn't matter if its a medical debt or a charged off credit card -- your rights remain.

It takes a certain type of person to be a successful debt collector. It's not the most glamorous job to have and it can be difficult dealing with debtors day after day. It goes without saying that the Federal Trade Commission who oversees consumer complaints, receives more debt collection complaints than any other. In 2010 the complaints actually rose over previous years which shows that the problem is still very much alive.

While there are plenty of legitimate debts to be collected there are also millions that are unfairly collected every day. A bill collector has legal issues to contend with if they break the law. The Federal Fair Debt Collections Practices Act ensures that we consumers are treated fairly by a bill collector. Your original creditor is not subject to the FDCPA because it's not their primary function. Once a debt has been assigned to an outside debt collector is when the FDCPA applies. This includes collection attorneys.

It's absolutely imperative that you understand your basic rights when it comes to dealing with a bill collector or you could be in for some big surprises. One being expired debts. While some state's make it illegal to attempt to collect an expired debt, others dont. In that scenario its up to you to make sure you advise the debt collection company of the expired debt so that they will cease collection efforts. You can learn more about the statute of limitations of debts here. Your State Attorney General is also a very good resource. If a debt collector has violated the FDCPA or harassed you in any way, your state AG can help. You can file a complaint online against the agency. We have a full list here of the Attorneys General nationwide. You may also file a complaint with the FTC at ftc.gov.

Another issue with harassment is ignoring the debt altogether. Expert's will tell you that ignoring bill collectors isn't a good idea but many times speaking with them doesn't preserve your rights. If you've received a notice of a delinquent debt from a collection agency you should address it but only in writing. Talking on the phone with a bill collector is not only stressful but it doesn't protect you like a paper trail will. Any time you deal with the collector - whether its a validation of debt or a settlement negotiation - cease and desist or other form of communication, it should be in writing. Always! Proof of delivery should always be used too so that you have proof if you need it later on. Take note that a cease and desist letter does not mean you dont still owe the debt. It only means that you've asked that the collector no longer contact you. They can still sue you. If you plan on using a cease and desist letter to stop a collector then you should understand how to use it.

Continuing to ignore the debt could lead to a judgment which can then lead to wage garnishments. If you let the account go to judgment and you dont show up to fight it, then by default it will be entered and you'll be left with double the trouble of a collection account. If you dont feel equipped to deal with the collection agency you can seek out a qualified consumer attorney who can act on your behalf.

On the flip "legal" side, if a debt collector has violated your rights, you can sue them as well. The FDCPA allows you to seek out damages including attorney fees. Many people who've been harassed by a collector and were able to prove it have received compensation. You can read more here about suing collection agencies.

If you have sought bankruptcy protection then you need to notify the bill collector. By law the collector must stop any collection activity once they've been advised of your bankruptcy. In addition, your credit reports must report accurate information about your accounts if they've been included & discharged in a bankruptcy. Leaving the account status as "collections" could be seen as an attempt to collect the debt and a violation of your rights. The debt should read as "included in BK".

Finally, if you simply cannot pay your bills including collection accounts you should speak with a debt management company. A non profit agency can step in and without charging you directly, work with your creditors to reduce the payments on your existing debts. This can have a huge impact on your finances and sanity. Not only will you stop the collection activity but your new payment plan will give you some breathing room. With the economy as its been over the last five years, more and more bill collectors and original creditors have eased their policies for debt management allowing you to successfully enroll almost all of your debts.

Find more help: Debt management | Debt settlements | Bankruptcy attorneys | DIY credit & collections help