6 tips for dealing with debt collectors | finder.com

How to deal with credit card debt collectors

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couple-facing-a-debtcollectorIt’s illegal for a bill collector to harass you — and you have the right to report them.

It’s a debt collector’s job to track down people with overdue debts and get them to pay, but that doesn’t mean they can try to get the money by any means necessary. Know your rights when dealing with collectors — and what to do if they’re violated.

When will debt collectors get involved?

Collection agencies usually won’t get involved straight away. In most cases, your credit card issuer will contact you directly about the debt until more than 60 days have passed with no payment. Once that happens, the account is considered “in default” and your issuer can choose whether or not to enter the debt collection process.

Some issuers may continue to contact you directly after your account is in default, but they also have the option of using a debt collector to deal with the situation.

How can debt collectors contact me?

Debt collectors will contact you to discuss your credit card debt and different payment options. The way they contact you varies, but can include:

  • Phone calls
  • Letters
  • Emails
  • Social media
  • In person

Debt collectors may use one or a combination of these contact methods to get in touch with you, but the US government sets legal limitations on when and how often they contact you.

The Federal Trade Commission (FTC) has a general guide to the conditions and requirements debt collectors should meet when dealing with individuals. It’s a good idea to refer to this information if you think the contact you receive is unreasonable.

How can debt collectors make me pay?

If written, phone or face-to-face contact does not lead to an agreement between you and the debt collector or collection agency, they have two other options:

  1. Legal action. If you don’t pay the debt, the collector can seek a court order to garnish your wages. Depending on the state you’re in, they could take up to 25% of your disposable income if they win.
  2. Repossession. If your debt is significant, your lender can initiate proceedings to repossess any assets used as collateral.

Complete guide to the debt collection process

Your rights when dealing with debt collectors

Confrontation by a debt collector can be intimidating, so it’s important to know exactly what your rights are if they ever contact you. Some of the key things to keep in mind include:

  • Privacy. Debt collectors can’t let other people know about your situation without your permission. That means they can’t reveal that they’re debt collectors to anyone else connected to you in person, over the phone or on social media. In fact, if they use social media or email to contact you, they must be reasonably sure the account is private. If you ever believe a debt collector has violated your privacy you can report it to the Consumer Financial Protection Bureau (CFPB).
  • Reasonable communication. Debt collectors can’t harass you with nonstop or late-night calls. For example, they can only contact make phone contact between 8:00 a.m. and 9:00 p.m. and they can’t repeatedly call to annoy you into paying. If you request that they stop calling, they have to obey that request.
  • Polite behavior. Debt collectors should always treat you with respect and be polite. It’s illegal for debt collectors to intimidate, threaten or harass you, and they can’t make false statements about you, the debt you owe or how they plan to collect.
  • Negotiations. You have a right to discuss your circumstances with the debt collector and to suggest reasonable repayment terms. You also have a right to request they only speak to your attorney.
  • Disputing the debt. If you don’t believe the debt is yours, or if you disagree with the amount that is owed, you have a right to legally dispute it. The CFPB has detailed information on the different ways you can dispute debts based on different circumstances.
  • Advice. You have a right, at any time, to seek legal advice to deal with a debt. In some cases, you may want to inform the debt collector that you plan to seek legal advice and suggest a time for them to contact you or a representative who will speak to them on your behalf.

Debt collectors have no right to mistreat you. Don’t hesitate to make a formal written complaint to the debt collection agency about any unreasonable behavior. You can also contact the CFPB or the Federal Trade Commission (FTC) for further guidance and support.

Tips for settling a debt on you own

What to watch out for

There are several things to be wary of when it comes to debt collectors.

  • Forceful tactics. Don’t let the debt collector pressure you into paying before you’re certain the debt is legitimate. Request validation of the debt in writing the first time you’re contacted — they’re legally obligated to comply.
  • Mistaken information. Verify the debt amount and any information associated with it against your own records. If they don’t match up and you don’t think you owe the debt, dispute the debt in writing.
  • Misleading information. If a debt collector tries to convince you they’ll garnish your wages, take money from your bank account or send you to jail if you don’t pay, know your rights and report them if necessary.

What should I do if I can’t pay back my credit card debt?

When you’re having trouble making credit card payments, the sooner you deal with credit card debt issues, the better chance you have of working out payment terms that fit your circumstances. Steps you can take include:

  1. Contact your credit card issuer. Let your issuer know about challenges or changes in your circumstances so they can work with you to arrange a repayment plan. Many credit card issuers have support and hardship officers available to help you work through these difficulties before things get even more out of hand, so it’s important to contact them as soon as you can.
  2. Talk to a financial counselor. Financial counselors can give you specialized advice based on your situation, and may also negotiate with lenders on your behalf. The National Foundation for Credit Counseling website has more information about these services if you want to get in contact with someone near you.
  3. Consider debt settlement. Debt relief companies help you negotiate with your lenders to settle debts for less than you owe. If you can’t afford to pay the debt, this option may be able to help.
  4. Seek free legal help. There are community legal centers and free legal aid services across the US, such as Legal Services Corporation (LSC) and Legal Aid. The government’s official guide to government information and services has a list of free legal services you can access when you need support and guidance about your debts.

Suze Orman’s credit card tips

Bottom line

Debt collectors can be an intimidating bunch, but with the right amount of preparation you can ease anxieties that may well up over the process. Knowing your rights and having all of your financial ducks in a row are two steps that can potentially save a large amount of frustration in the long run. You may not be able to steer the entire process but you can fully own what’s in your control.

Frequently asked questions

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Adrienne Fuller

Adrienne Fuller leads the publishing team at finder.com. With a decade of experience creating educational guides, she has one goal: deliver the accurate and transparent information she wishes she had when she made some of life's important financial decisions. When she's not helping folks save money, she's hiking with her two Catahoulas around her home in San Diego.

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2 Responses

  1. Default Gravatar
    AaronNovember 15, 2018

    My employer was recently served at her home by a sheriff on behalf of a debt collection law firm for a CC that I owe $5000 on. Now they are deducting 25% of my pay for said Credit Card. Is this legal? Should I seek professional counsel?
    Thanks

    • finder Customer Care
      JoshuaNovember 29, 2018Staff

      Hi Aaron,

      Thanks for getting in touch with finder. I’m sorry to hear about your situation. I hope all is well with you.

      Generally, it is possible for a creditor to garnish your wage. However, there are some requirements that should be met first before this is allowed. In most cases, creditors should first file a lawsuit and obtain a money judgment and court order before garnishing your wages. The same is true when it comes to credit card debts.

      I would advise that you seek professional help. You may also want to work with the proper authority such as the Federal Trade Commission (FTC) to know more about your situation.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

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