The presence of debt collectors in your life is an indication that you have a huge debt problem. These collectors are usually not in the picture if you paid your dues properly. As long as you were able to meet your debt payments and you did not miss your monthly due dates, they would never have any reason to call you.
But once they start calling you, that means you have messed up your finances and your debts will start to become more stressful. You see, creditors and lenders will only pass your debt to these collectors after your debt had been charged off. It means you have gone a long time without paying the debt. It also means they have given up on collecting the debt from you and have marked it as a loss. Debt collection agencies usually buy these debts at a very low price and they will try to profit from getting you to pay them back. Since their profit is dependent on your payment, you can expect that they will be very aggressive in getting you to pay them back.
According to reports, a lot of Americans are currently facing the aggressive behavior of debt collectors. 1 out of 3 Americans has at least one debt in collection. The median debt amount that is in collection is currently at $1,450.
Obviously, these people have to be ready to deal with having these collectors hounding them. But how should you deal with them?
How to deal with a debt collector
Once again, the average American consumer is in big trouble. The household debt is already more than $13 trillion by the end of 2017. This is a huge debt that we all have to get over. You can just imagine how much money that would cost us.
What makes this statistic scarier is the fact that 68% of Americans doubt that they can pay it off completely. This admission is a clear indication that they will be seeing debt collectors in the near future. If they are doubting their ability to pay the debt back, there is a higher chance that their debts will go into default and will be charged off. This is usually what brings debt collection agencies in the picture.
Sometimes, certain life events make it hard for some people to suddenly get out of debt. Not everyone landed in debt because of poor financial decisions. But regardless of the reason why you are struggling with debt, you should know that all debt collectors are the same. They will deal with you in the same way. This is why you need to know how to deal with them so you can negotiate your debt properly and save as much money on the payments as you can.
Do not get us wrong. What they are doing, asking you to pay your debts, is not wrong. It is your responsibility to pay it back. However, what we do not approve of is their aggressive and sometimes abusive methods of collecting the debt. This is why you need to learn how to deal with them properly.
Here are some tips that can help you out.
Figure out how they work
If you want to be better than someone, you have to understand them first. This is why you need to learn about debt collectors if you want things to work in your favor. You need to know that they do not care how you have come upon so much debt. They are only concerned about you completing your payments. And since this is their business, you can expect that they will do their best to make you pay. While they may be quite aggressive, they are not above negotiating. To best them at negotiating, make sure you understand the two ways they earn from this. One is by adding fees to the actual debt. The other is by buying charged off debts for pennies to a dollar. Keep this in mind so you will know when to push for more while negotiating.
Understand your rights
While there are good collectors, there are those who will stop at nothing to force you to pay your debts. This is why it is very important for you to know your rights. The government understands that these collection agencies can be very abusive and aggressive. This is why they have set up rules and laws that will protect consumers. Among the things that you should know include the following:
- They are only allowed to call between 8 in the morning until 9 in the evening.
- Collectors are also not allowed to call other people to discuss your debts (e.g. employer, family, friends, etc) – they can only do so to get your contact information.
- Using profane language or using profane language is also not permitted. They cannot say that you will go to jail or any other lies to force you to pay.
- If you send them a cease and desist letter to stop them from bothering you, they are required to comply.
Know your debts
Believe it or not, there are debt collectors who will try to make you pay for a debt that you did not make. Sometimes, they will force you to pay a debt that you already paid off in the past. This is why you need to make sure that you know your debts perfectly. Before you start talking about the debt with the debt collector, ask them to send you a verification that the debt is yours. This debt validation should be done within 30 days since the initial contact. Not only that, it should be in writing.
It also helps to get any leverage to help you negotiate. Check if the debt is beyond the statute of limitations. If it is, you do not have to entertain them since they cannot sue you in court anyway. If the debt is also about to fall off your credit report (usually in 7 years after being delinquent), then the debt will not affect you negatively anyway. You can let it go if you cannot afford to pay it back anyway.
Analyze what you can pay
If you think that your finances can pay for some of your debts, you need to look deeper into it. You may want to talk to the debt collector and ask them for debt repayment options. If they know that you are willing to cooperate, they will handle your case with more tact and patience. Check if they will accept you paying in smaller amounts or a lump sum and have the rest forgiven – like debt settlement. Obviously, the debt collector would want you to pay as much as you can – but if faced with the option of not getting anything at all, they might end up accepting what you can offer.
Put everything in writing
This is probably the most important tip that you need to remember when dealing with debt collectors. Anything that you have talked about should be written down. Send them an email of what you talked about. If you will decide on an acceptable amount of your payments, all of these should be written before you send a payment. This is to protect yourself in case this debt comes back to haunt you in the future.
Great alternative to deal with debt collectors
While debt collectors seem to leave a bad taste in most people, they are still human beings. They can only do so much and their hands are tied by the rules and laws regulating the industry. But that does not mean you need to force yourself to deal with them if you do not want to.
Fortunately for you, there are debt experts who can help unload this burden from you. While it is possible for DIY debt negotiation to happen, it can be quite stressful. If you need help, there are trustworthy debt settlement companies that you can turn to for help. There are two reasons why this could work in your favor.
You get professional help
First of all, debt settlement experts have been doing this for a long time. You can benefit from the experience and training that they got to be good at what they do. Not only that, their work has gotten them into contact with various debt collectors and even creditors and lenders. You will benefit from this connection. That should give you a higher chance at negotiating a more favorable agreement.
You can concentrate on your finances
The other reason why you should opt for professional debt settlement is it allows you to focus on your finances. Instead of stressing over the collection calls, you can concentrate on increasing your income so you have more money to use in your debt payment efforts.