Handling Bill CollectorsFree Sample Letters
Handling bill collectors who call and send intimidating letters can be extremely frustrating but you have various forms of protection and several proven techniques available. Of course, if you dispute the debt, let them know and insist they prove you are legally obligated to pay it. Creditors often get around the guidelines of the Fair Debt Collection Practices Act (FDCPA) by establishing their own in-house collections department. People working in these internal collection departments are considered employees of the creditor so, because they are collecting on behalf of the creditor, are exempt from the FDCPA. Many creditors use this loophole and allow and even encourage their employees to use collection tactics that are otherwise prohibited. These internal collectors call you at all hours of the day and night, call your neighbors and even your employer. These employees literally do anything to collect the debt. Some creditors even offer huge bonuses and incentives to the employee who collects the most on a monthly basis. Creditors collecting their own debts are not considered debt collectors and are therefore, exempt from the FDCPA. The Fair Debt Collection Practices Act sets guidelines for what debt collectors may or may not legally do when attempting to collect a debt. They are not supposed to call before 8 a.m. or after 9 p.m., threaten wage garnishment in states in which it's illegal, or harass you with phone calls if you tell them to stop. As a result, you have several options in handling bill collectors when they call:
We advise, however, to avoid phone calls to and from creditors whenever possible as this communication is always best done in writing. Some people even go so far as to forward all calls to a fax machine number so unwanted collectors get an annoying tone when trying to call you. Make sure there is no paper in the fax machine if you do this, as that will prevent relentless bill collectors from sending unwanted fax messages to you and force them to communicate with you by postal mail. Be sure you keep a diary of any collection calls made or accepted and make note of any terms agreed to, such as if you've insisted they stop calling you, especially if you've been called at work. You can tape the call if that's legal in your state, although it sometimes requires notifying the other party that you are doing so. Few debt collectors will make any statement that's out of line if they know they're being recorded. That recording or diary can be especially important if you have negotiated a reduction in the amount of the debt. Most debt collectors have the authority to accept substantially less than they're asking for. Since they get paid a percentage of what they collect, they're going to try to keep the amount as close to the original as possible. But they will accept less if you negotiate because any amount they can get you to agree to send them is better than nothing. Part of the agreement should involve a commitment on the debt collector's part not to put any negative marks, beyond what may already be there, onto your credit report. When handling bill collectors, you should also insist they report any payments you make and to adjust any amount owed. You could really play hardball when handling bill collectors and only agree to pay them if they agree, in writing, to delete the trade line from your credit reports. Get it in writing before you send anything more than a small payment. It's ok to send some money to demonstrate the sincerity of your commitment to the agreement, but if you send too much, they have little incentive to make the effort to comply with the terms you agreed to. Patience, realism and maintaining your calm during collection calls will go a long way in handling bill collectors and toward making an inherently unpleasant situation less stressful. The good news is that just because creditors are exempt from the FDCPA they are not allowed to get away with harassing you. They must still obey several other state and federal consumer protection laws.
After making or receiving a call, log it and as many details of the call as possible. Use a phone log to keep track of who you spoke with and when when handling bill collectors. Here is a list of questions you do NOT have to answer when asked of by a bill collector: -Are you paid weekly or bi-weekly? -How much is your take-home pay? -Is your spouse working? If so where, how are they paid, amount, etc. -Do you have other sources of income, such as child support, part-time work, in home day care and so forth? -Do you rent or own? How much per month? Is your rent or mortgage current? -How much is your car payment? Is it current? What are the make, model, and year of your car(s)? -Where do you bank? (checking and savings, name of bank) Do you have any bank loans? How much do you owe? Are they current? -Have you ever borrowed money from parents, relatives, or friends in the past? If so, how long ago? How much? Did you pay it back? Remember, under the Fair Debt Collections Practices Act, it is illegal for Debt Collectors to: -Use obscene or profane language -Harass or abuse consumers by annoying, repeatedly ringing the telephone, or engaging in long, tedious conversations -Discuss a consumer's debt with third parties such as neighbors, children, and employers -Continue collection practices on unverified debt after a consumer has disputed the debt in writing -Imply that failure to pay the debt will result in imprisonment -Call a consumer at work when they know the consumer's employer prohibits such calls or calling at inconvenient times The best advice in handling bill collectors is to simply refuse to discuss personal finances over the phone and insist all communication be done in writing. Always follow up any phone call with a letter confirming the terms of any agreement between you and the bill collector. Remember that YOU control the situation so do not allow debt collectors to intimidate you.
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