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7 Best Way To Deal With Debt Collectors: How To Do It Right

7 Best Way To Deal With Debt Collectors: How To Do It Right
Tracy Stine Mar 1, 2019
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the best way to deal with debt collectorsDebt Collectors seem to be an annoying part of life, like death and taxes. Also, like death and taxes, debt collectors won’t go away if you decide to just ignore them.

In fact, ignoring debt collectors can get you into deeper financial trouble. In 2018 there was a total of $3.898 trillion dollars of consumer debt and about 2.28% of these debts were delinquent – that’s more than $88.874 billion dollars of bad debt.

If you are part of this mind-boggling statistic, it’s likely a debt collecting agency will be calling you and demanding payment. They’ll try many kinds of tactics to coerce you into paying. You need to be careful here because what you do and say can affect your results.

I’m focusing on Third-Party Debt collectors – those companies that collect debts on behalf of another creditor (your credit card company for example).

They need to follow the Fair Debt Collection Practices Act (FDCPA) in what they actually can and can’t do when talking with you. Let’s learn what these are:

Debt Collectors Can:

Some things debt collectors are allowed to do include:

  • Seek payments on old debts – Yes there are statutes of limitations where debts can expire, but only for lawsuits. Collectors can still call and seek payment on these old debts.
  • Pressure you – While they cannot coerce and threaten you, they can still pressure you to pay. This includes frequent calls, many letters, or talk about seeing you in court.
  • Sue you – They can sue you for failure to pay, but only when all other attempts have failed.
  • Sell your debt – Debt companies can sell of your debt to another company to deal with.
  • Negotiate with you – Because they buy these debts write-offs from companies at huge discounts, they’re able to negotiate with you on what to pay.

Debt Collectors Can’t:

Some things that they cannot do include:

  • Show up at your Workplace – The FDCPA prohibits any publicizing of your debts and showing up at your place of employment to demand payment is part of this.
  • Harass you – They cannot repeatedly call you, threaten you with harm, use profanity or abusive language, or publish any information about you.
  • Arrest you – You cannot be arrested for consumer debt.
  • Pursue you for a debt you don’t owe – There are always mistakes, incorrect and incomplete reports, so if a collector is hounding you for a debt that’s not yours, it’s illegal.
  • Call anytime – They actually have limited hours to call you, only between 8 am and 9 pm. You can request by phone or in writing to stop these calls (but that doesn’t clear the debt though).

Now that you have some understanding of what collection agencies can and can’t do, let’s explore 7 right ways in dealing with debt collectors.

1. Get Everything in Writing

Whatever the two of you discuss and agree on – get it in a letter and mailed to you.

Whether you agreed on a monthly plan or negotiate a lower amount owing, get them to send you a confirmation letter – which will be proof of the phone call in case they renege on the agreement.

If you’re disputing the amount owing or even the bill itself, you need to write a letter with copies of documents (keep the originals) proving your claim and mail it to both the debt collection agency and the original creditor.

Understand that you have 30 days after the phone call, or notice, to dispute it, after 30 days it’s assumed that you’ve accepted responsibility.

If the dispute showed up on your credit report, write a letter to the collection agency and to the credit bureau. The credit bureau will investigate it, usually within 30 days and see if they agree with you or not.

2. Keep Records

Log phone records of times of debt collection calls, the name of the company, the agent’s name, the amount they state you owe, and what was discussed.

Keep any correspondence between the two of you and the dates and highlight any discrepancies between the letter and phone calls.

This is important as it creates a paper trail of events and shows proof of any illegal activities – such as calling too frequently, giving threats, or anything else that they’re not allowed to do under the FDPCA.

3. Limit your Responses

Keep any responses to their questions short and consistent.

The reasoning for all their questioning is that they’re actually interrogating you and looking for ways to prove that you actually have the capacity to pay their bill.

Don’t talk about:

  • Your financial information – your banking, social security number, assets and properties should be left out. You can tell them your financial troubles and reason why you can’t pay.
  • Making a “good faith” payment – some people believe that by making a small payment you will keep you from being sued or avoid ruining your credit. But instead this resets your statute of limitations date as well as act as proof that you actually owe this debt.
  • Making promises or admit the debt is yours – even if it’s obviously your debt don’t make any statements like “I’ll pay next month”. This is validation that there’s a “contract” and again the statute of limitations is renewed.

During the phone call, keep your answers short and keep repeating them if you have to. Stay calm and without emotion – just like Joe Friday from “Dragnet” – just the facts ma’am.

4. Ask Them Questions

While on the subject of questioning, you can ask your debt collector a few questions as well. This helps with #2 – keeping records, and to verify that you’re the right person to speak to.

Questions to ask include:

  • What’s your name? Get their name so if a different agent calls you can state that you’ve already talked to a different agent. Get their phone number as well so if anything else comes up you can call them directly.
  • What is this about? Get the agent to provide details about the debt they’re trying to collect. Who’s the original creditor? What’s the original amount of the debt? How much of that are your company’s fees and interest?
  • Can you verify your information? Request written documentation from them to prove the debt as well as their authorization to collect it. They need to show they own this debt or are working with the original creditor and they have 30 days to send this.
  • How did you calculate the debt? Ask how the debt was calculated. Send a letter by certified mail requesting a debt validation letter and all attempts at collecting it stop until you receive a valid reply.
  • How will this debt be reported? If negotiations are agreed upon and your debt is reduced, ask how will this change be reported. Most credit bureaus will already know about this debt collection attempt, but any difference between a debt that has been settled for less than owed and paid in full can still have a lasting impact on your credit history.
  • Can you send me the documents? Any payment plan, reduced debt, or any other agreement should be presented in writing (as explained in #2)

Remember, any refusal to comply with any of these questions is actually illegal and interfering with your rights as a consumer. Also, any refusal could be a sign of illegitimate activity.

5. Act Fast

Whether you received a letter or a phone call, you should take quick action on it.

Depending on the situation with your debt, there are different actions that you can take:

  • If you doubt the debt is yours: Write a letter to the collection agency and dispute it or ask for clear verification.
  • If the debt is old: Find out your state’s statute of limitations are for filing lawsuits to collect. You may also want to research any applicable laws in your state, or consult with a lawyer.
  • If the debt isn’t yours: Write the debt collector and tell them the debt is not yours and you do not want to be contacted again.
  • If the debt is yours: Negotiate a reduction of the debt or a payment plan.

Action should be taken within 30 days of any notification, otherwise, it’s an indication that you’ve accepted the debt and must pay up.

6. Negotiate

I’ve mentioned this a few times already, but how do you negotiate your debt with them to either accept a lower monthly payment plan or to forgive part of the debt?

Here are some guidelines:

  • Understand how debt collectors work – I covered this in the beginning and knowing as much as you can about that company puts you in a better position to get what you want.
  • Know your rights – Again, knowing all your rights otherwise you may get caught up in their clever talkers and you’ll get maneuvered into a deal you don’t want.
  • Get some leverage – If you know that the statute of limitations is past for lawsuits, they’re more likely to accept smaller payments. Also check your credit report and see if this debt is still on your report or about to expire – then there’s less incentive for you to pay.
  • Know how much you can pay – figure out beforehand whether you can either pay it off in one sum or how much you can pay monthly before you start negotiating. Do not put yourself into more financial hardship by agreeing to their numbers.
  • Prepare for counteroffers – Start the negotiations at a much lower number than you’re willing to pay and barter back and forth until you reach close to the actual amount you actually want.
  • Stand your ground – Debt collectors will use any information they have on you to manipulate you. Remember to reveal as little personal information and stay calm but firm.
  • Get the negotiation in writing – If you’ve come to an agreement, get it in writing and don’t make a payment until you receive that letter.

7. Seek an Attorney

If all else fails and you’re still being sought for debts, whether they’re yours or not, the last step is to contact a debt attorney.

A debt attorney will make it more likely to overcome any court and legal issues you might face because of your debt and can determine the best route for you to work through your debt issues.

The lawyer can advise you of your choices, determine if any illegal methods have been used by the debt company, represent you in court with the creditor and work on your behalf, and finally help process bankruptcy. This doesn’t necessary mean bankruptcy is a choice right away, but that may need to be the final resolution to take.

Be sure to find a good reputable debt lawyer, ask many questions, get their fees in writing and remember, you don’t necessarily need to follow their advice, seek a second opinion if you’re uncomfortable.


Following these 7 steps in dealing with debt collectors will save you a lot of headache, money and time.  You may even beat them at their own game.

Take care of any phone calls or letters from these debt collectors, legally and quickly is the best way to solve them. Ignoring them, putting it off, or even trying to hide from them will only cause more financial headaches for you and your family.

Tracy Stine

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