Talk to Debt Collectors

What to Do When a Collection Agency Calls

The phone rings. It's a collection agency on the other line. Do you hang up? Pretend that you aren't home? Or should you speak with the debt collectors?

"Getting calls from debt collectors is uncomfortable and embarrassing so it can be tempting to avoid the calls. However, avoidance doesn't help the situation," says Jeanne Kelly, Credit Coach."Answer the phone and follow the next steps to quickly and painlessly get rid of that outstanding debt."

Here are six things to do when a collection agency contacts you:

1. Don't Be Intimidated

Don't Be Intimidated

Keep in mind that the collection agencies job is to get you to pay as much money as quickly as possible and some might even offer inaccurate information to get you to pay. "Many debt collectors will immediately threaten litigation, seizure of property and even arrest, but 99.9 percent of the time those things are not going to happen, especially right away, but they want to create urgency from the consumer," says David Levin, Attorney withLuxenburg & Levin, LLC specializing in fair debt collection. "Don't let the debt collectors intimidate you into paying money that you do not owe because as a consumer you have rights under the Fair Debt Collection Practices Act (FDCPA)."

2. Learn Your Rights

When you are first contacted by a collection agency, either by phone or by mail, take some time to understand the collection process and your rights. The Fair Debt Collection Practices Act (FDCPA) prohibits collection agencies from threatening action or using abusive language. Additionally, collectors cannot call you at work if you request them not to and can only call between 8 a.m. and 9 p.m. If you think that a debt collector has violated your rights, you can file a complaint with the Federal Trade Commission and the collection agency can be ordered to pay you up $1,000.

"If you don't want to be contacted by a debt collector anymore, you can request in writing that they cease all contact. If you don't have the ability to pay or need more time, this can be a way to get them off your back for the time being," Levin says.

3. Get Verification of the Debt

Verify the Debt

Under the Fair Debt Collection Practices Act (FDCPA), you have the right to request written verification of the alleged debt within 30 days of your receipt of the debt collector’s notice advising you of your right to request verification. Before paying or providing additional information, Levin recommends sending a letter by certified mail (the request must be made in writing) requesting verification of the debt. "Since the debt collectors are required to cease collection activities until they comply, this gives you time to investigate the debt or make arrangements for payment," says Levin.

4. Give Limited Information over the Phone

If you are contacted over the phone, be very careful about what information that you share, especially credit card information, social security numbers and bank account numbers. A very common form of identity theft is where someone poses a debt collector either for a valid debt or a fabricated one. "Be careful about making verbal admissions over the phone. These collection agencies record the calls and those recordings could come back to haunt you," Levin says.

5. Work Out a Payment Plan

Create a Payment Plan

If you determine that you are responsible for the debt, make every effort to pay back the money that you owe. If you are not in the position to write a single check for the amount, determine if the collection agency will work out a payment plan. "Debt collectors deal with many people every single day, and not all of them want to pay off the debt as much as you do. Ask the debt collector to help you put together a plan to get the debt paid off. Be realistic as you put the plan together," Kelly says. "It's better to stretch payments out over a longer period of time than to keep missing one payment after another."

6. Consider Hiring a Consumer Attorney

If you are unable to work out the issue with the collection agency or feel that your rights have been violated, consider hiring a consumer attorney. Once the debt collectors are notified that you are represented by an attorney, all contact about the debt must go through the attorney instead of you. If a judge rules that the company has violated your rights, then they can be responsible for paying your attorney fees.