How to deal with debt collectors: A contrarian view

Paying off debt is a necessary grind, and sometimes, things can go awry. Debt collection agents can become involved, and you may want to tell them where to go. However, that tactic is far from productive. Here’s how to deal with debt collectors in a way that may surprise you.

Answer the phone

What? Answer the phone when a debt collector calls? Consumer debt expert Michelle Dunn says that’s exactly what you should do. Short of bankruptcy – if you’re even eligible – the simply truth is that you’re going to have to pay off your debts, so ignoring debt collectors’ attempts to verify information and possibly collect payment is a bad idea.

“You will have to deal with them calling and sending you letters, and the debt may be reported to your credit report. You should never ignore a collection agency — that only intensifies the calls…and can promote court action,” said Dunn.

It is important to promptly verify that the debt attributed to you is accurate and correct. Creditors have been known to make mistakes before, which means that many consumers have actually been able to discharge falsely attributed debt and save their credit scores.

“You must ask for verification within the first 30 days of being contacted. If you wait and ignore the calls and letters and the 30 days goes by, by law you are acknowledging that you owe the money,” said Dunn. “It will be much harder for you to dispute the debt after that, and you may lose in court, since the law states you have 30 days to dispute the debt or request the verification. So the best thing to do is make payments or stay on top of the situation and dispute within those first 30 days, in writing!”

If the debt is verifiable

Assuming the debt is verifiable, however, you should immediately discuss making a payment plan with the debt collector and make regular payments. If the collector believes you’re holding out on them, they do have the legal right to take a debtor to court. Set worries about your credit score aside and pay debts off as you can, because liens and judgments against you are more serious.

“Once accounts are placed for collection, you just have to make payments to them all until they are paid in full,” Dunn noted. “The only way to get out of debt faster is to pay it off faster. Budget your money, cancel your credit cards, get rid of the cell phone, get rid of cable and internet, carpool, bring your lunch to work — get a part time job. The only way to get yourself out of the hole you dug is hard work; you need to make more money somehow and send as much of it as you can to the creditor.”

Know your rights when dealing with debt collectors

Sources

CreditCards.com

“Dealing With Aggressive Debt Collectors”

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