A Quick Guide to Dealing With Debt Collectors

By Mike Peterson
In April 3, 2016

Debt is stressful, but falling behind on loan or credit card payments can open the doors to an entirely new level of stress – and a near-endless stream of calls from debt collectors.

You’ve probably heard a story or two about debt collectors using scare tactics and less-than-legal tactics to contact people and collect past due debts. And, unfortunately, these tactics often work because folks are scared and unsure of their rights when dealing with debt collection.

And it’s important to remember that you do have rights – and debt collectors have to follow the laws and respect your rights. Not sure which debt collection tactics are legit and which tactics are taking things too too far?  Here are a few important guidelines to keep in mind the next time a debt collector comes calling:

  1. Debt collectors can contact you – but they have to play by the rules. By law, debt collectors are allowed to attempt to contact you in an attempt to collect a debt. They can contact you by phone, email, snail mail, or fax – they can even contact you in person. But no matter how they choose to contact you, they still have to follow the rules: Debt collectors can’t contact you outside of “normal” business hours (so, not before 8 AM or after 9 PM) unless you give them permission to do so.

And, speaking of permission . . .

  1. You can tell debt collectors how and when to contact you. Prefer to keep everything in writing? Want to put a stop to all communication while you figure out your next steps? You have the right to tell a debt collector exactly how you want to be contacted (or how you don’t want to be contacted). So, you can tell a debt collector to stop calling you and to communicate with you exclusively by mail. You can tell them to stop attempting to contact you completely.

A couple of things to keep in mind, though: First of all, putting a stop to debt collection calls won’t actually make the debt go away. Second, there are a couple of situations where debt collectors can still contact you, regardless of your preferences. For example, a debt collector can still notify you if they have filed a lawsuit against you or if they have decided to stop their collection attempts.

  1. Debt collectors can ask your friends, family, and coworkers for your contact information. It’s perfectly legal for a debt collector to call a third party such as a relative, an ex-roommate, or your workplace in an attempt to get your current phone number or mailing address. But they only get one attempt per third-party contact – in other words, they can’t keep calling your parents or your office if they don’t get the information they’re looking for the first time.

And, most importantly, debt collectors are only allowed to ask for your contact information. That’s it. This is because, by law . . .

  1. Debt collectors can’t discuss your debt with your friends, family, and coworkers. Yes, it’s legal for a debt collector to ask your mom for your address or phone number. But it’s completely illegal for that debt collector to discuss your debt with anyone they contact. They can’t even imply that they’re attempting to collect a debt. The only exception to this rule is if you’ve hired an attorney to handle your debt issues.
  1. Debt collectors have to provide details. By law, a debt collector is required to tell you how much you owe, who you owe, and what to do if you feel that there has been a mistake, which brings us to our next item. . .
  1. You can dispute the debt. Once you receive a notice from a debt collector, you have 30 days to file a formal dispute, in writing. Not sure what to say? Check out these templates from the Consumer Financial Protection Bureau. The debt collector is required to stop contacting you until the dispute has been settled.
  1. You can file a complaint if you feel harassed or threatened. If you feel a debt collector is harassing you by calling too often (or too early or late), or by making threats or using scare tactics, you can report them to the Consumer Financial Protection Bureau.

The most important thing to remember is that you do have rights. Even if the debt you owe is legitimate, debt collectors don’t have the right to bully or intimidate you, and they have to listen if you tell them to stop calling you. And remember: if you’re struggling with credit card debt, or if you’re looking for help and advice about building or rebuilding your credit, you can always reach out to Debt Guru.   Contact the Debt Guru team today for a free debt consultation.

 

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.