7 Tips for Dealing with Debt Collectors

[Feb 6, 2010.]

 

Falling behind on loan payments may lead to being hounded by debt collectors. Anyone who has borrowed money through a personal loan is obligated to repay it, but that doesn't mean they deserve to be harassed. Here are seven tips for dealing with debt collectors.

1.  Honor the commitment to repay a personal loan. As a borrower, you sign a contract that details your responsibilities for repaying the money. Not paying back a loan can dog your reputation and credit for years.

2.  Debt collectors come in all varieties, and some are more aggressive than others. But one quality they share is that they are very persistent about trying to collect money. Anyone who has stopped paying on a personal loan or credit card can expect to receive calls from a collection agency.

3.  People should avoid letting debt collectors anger or intimidate them. Some collection agencies resort to a bag of dirty tricks to get to people's emotions so that they can frighten or manipulate them into paying money owed.

4.  If you have fallen behind on personal loans or credit cards, make sure you understand your rights under the Fair Debt Collection Practices Act (FDCPA).  When a debt collector calls and becomes abusive or violates your rights as a borrower, you should inform the caller that they are violating the FDCPA. However, the legislation only covers personal debts, not debts related to running a business.

5.  Borrowers have control over when and how they can be contacted. The FDCPA prohibits collection agencies from calling before 8 a.m. or after 9 p.m. unless they have been given permission to do so. They also must stop calling a borrower at work after being told to stop.

6.  Debt collectors are violating the FDCPA if they use abusive language, make threats, or make false claims about being attorneys or government officials. They also cannot lie about how much a person owes.

7.  It's a good idea to talk to a debt collector at least once to try and work out an arrangement. After that, you may choose to write a letter--sent by certified mail, return receipt--directing the collection agency to stop contacting you. After that, the collection agency can contact you only to let you know there will be no further contact or to inform you of a specific action, such as the filing of a lawsuit.

Finally, if you have fallen behind on personal loan payments, you shouldn't believe debt collectors who say that you are going to jail. However, being delinquent on a personal loan can result in a lawsuit.

 

About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.