If you’re phone is ringing off the hook, or your debt collectors are literally breaking down your door, it’s time to learn your rights and how to handle them. No matter why you ended up delinquent on your accounts, dealing with debt collectors is humiliating and infuriating. However, there are a few steps that you can take to ensure that you will not be taken advantage of.

1. Find out if they are an actual collection agency.

If it is a collection agency, then there is a very good chance that they purchased your old debt for pennies on the dollar. This means that they will be very likely to settle for a lower amount, because they make money no matter what. For example, many companies will purchase a $2000 debt for a mere 87 cents. Anything they make over that is sheer profit. This gives you a chance to negotiate for a smaller overall payout.

2. Don’t hide.

Hiding from debt collectors is never a good idea, it will only make your situation worse and you may actually end up getting sued. It is best to face the problem head on. If you need to buy extra time, you can request that the debt collector provide you with proof that you actually do owe the debt. This gives you about thirty days to come up with the money to pay it, and during that period, they are not allowed to contact you.

3. Read the FDCPA act.

You have rights, but your debt collectors are putting money on the fact that you may not know them. The first step is to read through the Fair Debt Collections Practices Act. This outlines exactly what a collection agency or debt collector can and cannot do to collect on a debt. You can get some great tips on how to handle the situation from this act and your debt collector’s won’t be able to pull the wool over your eyes any more.

4. Don’t cave to threats.

Debt collectors can be very shady. They will threaten you with criminal arrest, they’ll threaten to ruin your reputation. Legally, they cannot do this. You cannot be arrested for a bad debt, unless there is a bad check involved. Once again, read the FDCPA act to get a clearer understanding of all of your rights.

5. Don’t be afraid to report them.

The FDCPA has a reporting system in place where you can get assistance if you are being harassed by a creditor or a collector. If you are getting calls in the middle of the night, being unduly harassed or actually threatened, you do have recourse.

Do not fall prey to these pressure tactics, and stand up for your rights. Chances are when you do, the collection agency will suddenly back off. They only like to deal with people they can intimidate and once you know your rights, you will have a lot more power that you can assert.

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Originally posted 2008-08-26 05:22:40. Republished by Blog Post Promoter

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Bankruptcy, Debt, Money, Personal Finance

Tags:

bad debt, dealing with debt collectors, debt collections, debt collector, extra time, good chance, hook, Money, outlines, pennies on the dollar, proof, reputation, sheer profit, thirty days