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Debt Consolidation Facts

How Much Debt Do I Need to Have to File Bankruptcy?

What are the Limits of Debt Collectors?

Do You Know How Much Debt You Actually Have?

7 Reasons To Seek Credit Counseling

Cutting the Cost of Your Phone Bill

Is There Such a Thing as Non-Profit Debt Consolidation?

To File or Not to File: When is Bankruptcy OK

How Do You Choose a Debt Consolidation Company?

When Creditors Call: Dealing with Debt on the Phone

If you owe money on an auto loan, have credit cards, or have a mortgage loan, you are considered a debtor. If you fail to repay your creditors as agreed or an error is discovered on your accounts, debt collectors will usually contact you via telephone. Creditors sometimes recruit the services of a collections agency to dun consumers with calls until they repay their balances. When debt collectors get involved, the calls can easily get out of hand, both in quantity and the tenor of the exchange. In the past, creditors have stooped to all kinds of unseemly tactics, including calling dozens of times each day or making threatening statements to debtors. However, since the passage of the Fair Debt Collection Act, debtors no longer have to suffer these indignities and abuses. Read on for an explanation of your rights and how to deal with creditors when they call.

Your Rights

The Fair Debt Collection act is very specific about how creditors must behave when calling debtors. We have provided a brief synopsis of these rights below:

• A creditor cannot call you before 8 AM or after 9 PM unless you agree
• A creditor cannot call you at work if he/she knows that your employer disapproves
• A creditor may not use phone calls to repeatedly annoy the debtor
• The creditor may not threaten violence or harm or use abusive or profane language
• The creditor may not contact other parties concerning the debt except to find out where you live, where you work, and what your phone number is

Making It Stop

If you do not want the creditor to call you again, you must mail a written request to the collection agency asking them to cease contact. After the collection agency receives the letter, they cannot contact you again except to tell you that they will make no further contact or to inform you of the actions the creditor or debt collector intends to take. If a creditor fails to discontinue contact after you have made a written request or if the creditor violates the Fair Debt Collection Act in any other way, you have two means of recourse. First, you can sue the creditor up to one year after the law was violated. Alternatively, you can also report the creditor’s violation to your state’s Attorney General’s office and the FTC (Federal Trade Commission).

Negotiating with Creditors over the Phone

Here are a few tips for negotiating with creditors over the phone:

• Don’t make promises you can’t keep. Don’t say you will make a payment and then not do so; the creditor can later sue you for not making good on your promise.
• If you make a request that the collector denies, ask to speak to the supervisor
• Do not provide the creditor with your checking or savings account information. If you agree to make a payment, insist on mailing it instead of agreeing to an automated payment.
• Don’t be afraid to haggle with the collector. If you’re persistent, most creditors are willing to accept a payoff amount of 50%-70% of the full balance.
• Stay calm and don’t raise your voice. It’s easier for creditors to take advantage of you when you are intimidated or upset.