How to Work with a Debt Collector

If you have let a debt slip by the wayside, then chances are that you eventually will be contacted by a debt collector. The first impulse of most individuals in this situation probably is merely to stop the debt collector’s calls. If an individual is successful in seizing the efforts of one debt collector, however, he or she probably will have to deal with many more down the line as the debt is continually sold.

Instead of trying to stop a debt collector in his or her tracks, perhaps voluntarily working with the collector to rectify the situation might be the best choice for some individuals. If you decide that working with a debt collector is a better choice than fighting against him, how should you go about it? How do you work with a debt collector effectively?


Step by Step

When you are first contacted by a debt collector it should be writing, but a call may be just around the corner. If you recognize the debt immediately and you know that the amount specified is accurate, then you can proceed. If you are unsure of the debt in question however, if you think that you owe less, or if you believe that it already has been paid, then write to the debt collections agency immediately with your thoughts on the debt. Ask them to verify that the debt on which they are collecting is correct.

If you know the debt to be accurate, or once the debt is verified, then you should work with the collector just like you would any other lender. You should negotiate your debt and try to agree on a payment plan. Almost all debt collectors will be willing to negotiate, especially if you make negotiation their only option. It is their choice: negotiate with you and get a good portion of the debt, or sell your debt to someone else.

When you come up with an agreement of any sort, have the collector record it in writing, and make sure that all payments that you make to the collector are recorded accurately in writing as well. Once you pay off your debt according to your agreement, that debt is considered paid in full and you should not have any other collector contact you about it. Now, isn’t that better than having to live in fear of the phone for the next several years until the statute of limitations on your debt runs out?

Warnings

#1: Do not give out your bank account information when negotiating your debt. Instead of allowing a debt collector access to your funds for payment, pay via a different method. Some debt collectors have a few tricks up their sleeves. Maybe you gave the collector permission to withdraw funds from your account in excess of your negotiated agreement without really realizing.

#2: Watch out for harassment and abusive practices. While harassment might go hand-in-hand with the stereotypical portrayal of debt collectors, in reality harassment and abuse by debt collectors is against the law. Debt collectors must abide by all standards set forth in the Fair Debt Collection Practices Act.

#3: Before you agree to a payment plan with a debt collector, be certain that you know the age of the debt in question. It is not uncommon for debt collectors to contact individuals about debts right before the statute of limitations is about to expire; that is, the period of time during which a debtor successfully can be sued for repayment of a debt. If the statute of limitations on a debt for which you have been contacted is about to expire, then it might be in your best interest not to pay it. If you do pay, then the statute of limitations starts completely over again.