Debt Collectors: How to Deal with Them and Get a Better Deal

To say debt collectors knocking at your door, phoning you day and night or sending you threatening letters can be intimidating and stressful is the understatement of the century. Luckily there are forms of protection and techniques you can use to deal with them.

The Fair Debt Collection Practices says that debt collectors can’t phone before 8am or after 9pm, they can’t take your wages or harass you with non-stop phone calls.

[For the full text, see: http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#801]

Because of this you have several options. First of all, you don’t even need to take the calls, simply use your answering machine to screen calls before picking up the receiver. If you have a call blocking service you can filter them out altogether.

If you do pick up the phone, simply tell them you don’t want them to call you again; legally they have to respect your wishes if you send them a ‘cease and desist’ letter. Taking legal action can be very costly so you may want to deal with them in other ways initially.

Ultimately, if you took out a debt and the creditor is entitled to repayment then paying it off would be a sensible option. If money is tight however you can try negotiating a lower rate.

If you keep your end of the bargain then the phone calls with end. At the end of the day, debt collectors are just doing their job and are humans too. Once and agreement has been set up and you stick to it, they will simply leave you alone and target other debtors.

Start a diary and take notes of calls made and received along with the content of the conversation. Write down that you told them to stop calling you. You may even want to record the calls you have made, however it may be a legal requirement for you to inform the advisor of this.

If a debt collector knows they’re being recorded they will usually be on their “best behaviour.” A diary or recording can become very important if you have negotiated a better deal on the debt.

What you may not realize is that the majority of debt collectors are able to reduce the amount owed. Because they receive a percentage of the collected amount, they may think it’s worthwhile to have 50% of $700 than %100 of nothing.

When making an agreement about payment, you’ll also want to have the collector agree not to add any further black marks to your credit report. You should also be firm about them reporting quickly about payments you make and adjust the total amount due.

Ensure you have this in writing before sending substantial amounts. Send a small amount to prove that you mean what you say; but if you send too much they may not bother binding to the agreement you made over the phone.

Always stay patient and calm during your conversations. You don’t want to make the situation any worse than it already is.  Be prepared to take financial advice.