Nobody wants to be in debt. Sometimes circumstances are beyond your control, however, and you end up with unwanted attention from a debt collector. It can be a frustrating, demoralizing and even frightening situation.
When a debt collection agency has you in its sights, it can seem as if there’s nowhere you can go to escape. Unwanted phone calls can disrupt your life at any time of the day or night. They can threaten you with wage garnishment, lawsuits and more. There are seemingly no limits to what they can say to guilt, harass and scare you into paying your debts. The debt collectors can even call up your friends and your place of employment, which can be a huge disruption and the source of great embarrassment.
Fortunately, there are rules debt collectors have to follow. Understanding your rights won’t make your debt go away, but it can definitely improve your interactions with the collection agency.
Debt Collectors Can’t Just Do Whatever They Want
Most debt collection agencies operate under the assumption that the people they deal with don’t fully understand their rights. The agencies will often take actions which are illegal, with the hope that you’ll be too concerned about your debt to care about their practices. Fortunately, federal law is on your side.
The Federal Fair Debt Collection Practices Act of 1977 provides a series of rules debt collectors must follow. If you familiarize yourself with this Act, you’ll then know when a collection agency has stepped over the line.
Here are some common ways debt collectors abuse the rights of the average person they call:
- Threats of Wage Garnishment – Any debt collector who initially threatens to garnish your wages is probably lying. In order to garnish anything from your paycheck, they must first file a lawsuit, which can take months. The only exception to this is in the case of student loans or taxes, which are situations where your wages can garnished.
- Inappropriate Calling Time – While debt collectors are allowed to call you, they aren’t allowed to call you at all hours of the day and night. The Debt Collection Practices Act states collection agencies are only allowed to call you between eight in the morning and nine at night, your local time. The idea is to prevent people from making rash decisions if they’re woken up in the night by a collection agency. If debt collectors are calling you outside of the designated hours, you need to remind them of the law. While you shouldn’t have to, silencing your phone is another option to avoid harassing calls.
- Inappropriate Calling – Friends and Employers – Collection agencies may try to contact your friends and employers. This can be tricky. They aren’t allowed to identify who they are or why they’re calling. While it seems unlikely that contacting your friends and family will get the collection agency the money they’re seeking, it does usually cause embarrassment for the person being collected upon. Debt collectors are not legally allowed to call you at work if your boss prohibits it. They are also not allowed to call your friends if they (the collection agency) know where you live. This means to stop calls at work, you simply have to tell them your boss doesn’t allow you to receive calls there. To stop calls to your friends, you’ll need to answer the agency when it calls you at home or on your personal cell phone. Even if you can’t pay anything right now, when the debt collection agency knows your home location, they are no longer allowed to call your friends in an attempt to find you.
- Failure to “Get it in Writing” – Sometimes, you have some money to pay off a part of your debt, but not all of it. The debt collection agency might offer you a settlement. If they do, be careful. An offer of a settlement is a common trick used by collection agencies in order to gain access to your bank account.
Here’s how it works:
The collection agent, over the phone, will offer you a debt settlement. In order to pay this lower amount, you’ll be asked to give the agent your bank account information. You’ll also set up a payment plan where a certain amount of money will be deducted from your account each month. When enough has been deducted to pay the settled-for amount, the debt will be over and done with.
This is how it is promised to work, but it’s usually not what actually happens. Instead, the collection agency, now with permission to access your bank account, now has access to all of your money. They will take as much as necessary to pay the original amount, and if you don’t have enough, they will take all that you have and come back for more.
If you’re offered a settlement, and it’s something you can afford and want to pay, be sure and get the details in writing. Many times debt collection companies are willing to settle. They would rather have some money from you than be unable to collect on the debt entirely. But the only way to be sure you’re getting a fair deal is to get the terms in writing.
Debt-Free is the Way to Be
There is one other option you can also consider. You can send a registered letter to the agency stating that you refuse to pay the debt and that you want the agency to stop all contact with you. Legally, this will put a stop to the collections attempts. It will also almost certainly end with you in court or with your wages being garnished.
Staying out of debt is easier said than done, but it should be your ultimate goal. Until that day, however, your best bet to avoid harassment from collectors is to answer your phone. When the collection agency knows where to find you, they’re no longer allowed to contact your friends and employers. When you agree to a settlement, in writing, you can also exert some control over how and when you repay your debt.
Debt can be a terrible experience, and debt collectors can make it much worse. If you take the time to learn your rights, however, you can stand up to any harassment. It won’t make your debt go away, but it will make your life much easier.