Debt Collection Tips
Dealing With Debt Collection Agencies
Debt collectors are third parties hired by a lender to attempt to collect amounts you owe when you're late with your payments; they can be lawyers or companies in the business of collecting unpaid accounts.
Dealing with a debt collector is stressful and scary. Don't ignore a collector even if the debt is not yours. It is in your best interest to respond to a collector immediately. When negotiating with creditors, don't agree to a plan that you're not sure you can stick to. You'll need to do a budget and calculate how much money you can squeeze out of it each month to apply to the account in question before committing to a payment plan.
You can save yourself a lot of grief when dealing with debt collectors if you're familiar with your rights under the Fair Debt Collection Practices Act, the federal law that specifies what third-party debt collectors can and cannot do in their attempts to get you to pay up.
When a collector calls get as much information as possible. Ask for the name of the caller, the collection agency, the creditor, and the address and fax number for sending correspondence. Also ask about the amount the collector claims you owe.
Review the amount you are being asked to pay. You should ask the collector to tell you the amount of the original debt as well as give you a breakdown of any interest, fees, or charges that have been added.
Corresponding with a Debt Collector
1. Start a file at your first contact with a collector. In this file keep all letters you write as well as ones sent to you. Keep notes of your telephone conversations and the names of everyone you speak to, with the date and time.
2. Send any correspondence, including disputes, to both the collection agency and the creditor by Certified Mail, Return Receipt Requested. Always send a written confirmation of anything that you may need to prove later (such as; a promise or threat made, a rude or harassing comment received, or an explanation given you that may show improprieties in the handling of your dispute or your payments).
3. When you negotiate a repayment plan over the phone, ask the representative to send you the terms of the plan in writing. Also write a letter that explains your understanding of the negotiated repayment plan. Any promise to remove or adjust reports in your credit history should be documented for later enforcement.
