Last week I discussed what you needed to do to negotiate a deal with your creditors, this week I’m going to dive into the do it yourself debt settlement tactics you are going to need to contact a collection agency.
You might also be wondering what the difference between calling your creditors versus calling a collection agency, and in two words, a lot. Collection agencies will at times not be afraid to use more hard core and at times illegal tactics to get you to pay up on your debts.
So, can you handle the truth, if so lets get started?
How Collection Agencies Work
Collection companies are used by creditors when a debt has been deemed unpaid for a certain period of time at which time the debt is handed over to a collection agency. The debt is still owned by the creditor but the CA is in charge of collecting the debt now.
If you are getting calls from a collection agency you should know your rights when it comes to them contacting you. Anything from using threats, false claims, to calling you at inappropriate hours can qualify as harassment. If you would like to know more about your rights check out the FTC’s website.
How To Deal With The Collection Agencies
If you owe a debt you should first talk to the CA and discuss the situation with them. Talking to them in a rational tone will make things go a lot smoother rather than avoiding them. This will only make things worse and could lead to unnecessary lawsuits.
However don’t give into them by giving up your financial information. Request that all debt be validated. To do this you need to send them a letter that ask for proof that you still owe on the debt. You can check out a sample letter here.
Once you know that the debt is yours ask them to give you some time to pay off your debt. Discuss a payment plan that is fair and equal. Don’t let them talk you into something that you cannot do. This will only strain the situation. Don’t be afraid to have some thick skin here and demand some time to pay the debts.
If you do agree on a plan ask them to send you a statement in writing to back you up just in case they don’t hold to their promise. I would also consider recording the call with them to ensure the proper communication between both parties.
Recording the call holds the collection agent to a hire standard. If they would happen to threaten you in any way you would have all the evidence you need to push a lawsuit on them.
Also let the collection agent know that you are recording them even if you don’t. It’s just one simple trick you can use to keep the CA in line.
However, their may be a case were you have already paid off the debt and collection agency is requesting payment. In this case you can ask for a cease and desist.
To do this you have to dispute the debt owed within 30 days of receiving notice and send a dispute letter along with proof of the debt already being paid off.
The same would also hold true if collection agency contacted you about a debt that was discharged through bankruptcy. In this case though you will have to send a cease and desist order along with a copy of your discharge statement from your bankruptcy showing the debt had already been cleared off.
Finally, if a collection agency calls you several years after the fact and claims that you have not paid a debt yet they may not be able to take any legal action against you. This all depends your states expiration period also know as your statue of limitations, were a CA will not have the right to take action against you after a certain period of time but each states SOL is different.
However, I have one word of caution to tell you, what ever you do don’t pay the collection agency anything. If you do this the collection agency will have the full right to pursue you for the payment.
To stop the collection calls send the CA a letter that the Statue of limitation has expired and that they are no longer legally allowed calling you to pursue the debt. Here is a sample letter to help you out.
Questions???
Nobody said the do it yourself debt settlement route was going to be easy. If so feel free to ask any questions you need in the comments area below.