Know Your Rights: 8 Things to Know About Debt Collectors
If you have outstanding, unpaid balances, it’s standard practice for organizations to call in a debt collection service. These services will contact you about repaying the debt.
Often, it can be a cordial and professional encounter, but at other times they might use scare tactics to get what they want. Some debt collectors even take unfair and illegal advantage of debtors because they expect a client to lack basic knowledge about the issues.
This can be a frightening ordeal, but it’s not so bad if you know what to expect. You have certain rights in the debt collection process, and knowing them can help you come out on top.
Here are eight secrets that debt collectors don’t like debtors to know.
- You control all communication.
In some cases, debt collectors might contact you repeatedly, almost to the point of harassment. It’s important to understand that you have rights with regard to the way you and a collector communicate.
You may dictate the method and time that collectors contact you. You can even request that they cease all communication after initial contact.
Collectors must also use professional communication under penalty of law. They are prohibited from using vulgar and profane language, lying to you, or making threats.
You may record your conversations in case the collector behaves inappropriately, and the recording will help if you have to make a case against an unprofessional collector. If you plan to record the conversation, inform the debt collector first, however, so that it will be admissible in court.
- You have the right to dispute the debt within 30 days of first contact.
A collector is legally obligated to inform you of the debt and all its details during initial contact. Occasionally, you might be contacted about a debt that’s not yours. An inaccurate debt amount might be sought.
According to the Consumer Financial Protection Bureau, “If you don’t dispute the debt within 30 days the debt collector will assume the debt is valid.” To dispute the debt, you’ll need more information about it, including the name of the original creditor so you can get to the heart of the matter.
“If you request the name and address of the original creditor within 30 days, if different from the current creditor, the debt collector will provide you that information,” says the CFPB. It’s vital to understand your rights after the debt has been disputed, particularly when it comes to formal communications between you and the debtor.
The CPBD states: “If you dispute all or part of a debt in writing within 30 days of when you receive the required information from the debt collector, the debt collector cannot call or contact you to collect the debt or the disputed part until the debt collector has provided verification of the debt in writing to you. Always keep a copy of your letter for your records.”
This will protect you in the event that collectors continue to harass you after the disputation has been submitted.
- You can bypass the debt collector altogether and work with your original creditor.
Though collectors will offer to help you resolve a debt, you’re in no way obligated to work with them. In some cases, it can be preferable to contact the original creditor.
Once you’ve been informed of the collections procedure, contact the original creditor directly. From there, you may be able to negotiate the terms of your debt and avoid some of the fees associated with going through a collector.
Although this is the recommended course of action, it’s not always an option. If you have an outstanding debt of more than six months, you’ll likely be rerouted automatically to a third-party debt collector.
Most creditors will work with you shortly after the debt is incurred, but they have the right to refuse assistance after they’ve notified a collection agency.
- Debt collection items can have a huge impact on your credit score.
Unfortunately, you won’t be able to dodge this bullet. A single debt collection could drop your score as much as 70 points, and the item will stay on your credit report for about seven years.
Understanding the impact on your credit score is critical. Obviously, it underscores the importance of avoiding debt collections whenever possible. Keep up with your payments and try to negotiate payment problems with the original creditor first.
Second, it can help you make plans to repair your score. The best way to repair your credit is to establish a pattern of paying all debts on time for several years. You could also discuss the matter with credit repair experts or a lawyer to understand your options.
- Don’t let emotions or scare tactics dictate your actions.
Debt collectors have many jobs, one of which is to assess your emotional state and use it to get more money. You can’t let your emotions control you.
“A lot of people are ashamed of having their debt, and that’s what debt collectors prey on,” Ramon Khan, a former debt collector from Texas, shared with Nerd Wallet. “They create that urgency and prey on those pain points to get you to pay something. At the end of the day, if you owe $50,000 or $100,000, they don’t really care that you’re going to pay all of it. If they can get you to pay part of it, that still works toward their quota.”
The best approach is to keep your calls short and professional. Don’t give away extra information that could give the creditor the upper hand in negotiations. This won’t make the collector go away, but it may help you avoid paying more than you should.
- You can negotiate with collectors.
Ultimately, the debt collector’s primary directive is getting debtors to pay as much of the debt as possible. They’ll often ask that you pay everything at once.
But they’ll readily settle for a portion of the debt if you negotiate. Tell them how much you’re able to pay, and they may choose to settle for that amount or arrange a deal that’s closer to what you can afford.
The most important part is to get the terms of the deal in writing. Once the terms are in writing, you’ll avoid miscommunications or backwards dealings, and your written contract will hold up in court.
- Your personal information can and should remain a secret.
It’s not uncommon for debt collectors to demand personal information such as a birth date, Social Security number, bank account numbers, or full name before they disclose the amount of debt owed. They might assure you they can’t disclose the amount until you share the information or that sharing it will qualify you for a lower payment amount.
You don’t have to offer such information, however, and it may be prudent not to. For one thing, the debt collector could actually be a scam artist looking to collect personal information for identity theft.
Every piece of information scam artists collect brings them one step closer to stealing your entire identity. Even if you’re sure it’s a real debt collector and not a scam artist, don’t offer the information.
“This information may be used to collect from you if the creditor or collector gets a judgment against you,” says an article from Nolo. “You can provide basic information about your income or financial troubles. As a general rule, if information could be used by an identity thief, it should not be given to a collection agency.”
- Call Rowdy Williams Law Firm P.C. to defend against debt collectors and get you off the hook.
You never have to go into the debt collection process alone. With the help of Rowdy Williams, you can work through your debt case and get the relief your seeking.