Regrettably debt collectors are often less than ethical. This has caused the government to pass legislation to protect you from unethical debt collection tactics.
If the debt they are contacting you about is accurate then you should ask for debt validation. This should be done in writing.
Failure to do this and if you ask for validation over the phone, 99% of the time it will be completely ignored. Additionally send your letter certified mail so you have proof that they received it.
If you debt is validated and is within the statute of limitations in your respective state then you can negotiate payment. Limitations are typically seven years from the first date of delinquency.
When negotiating payment you should never pay the whole balance. This is because your debt has been purchased from the creditor for a fraction of the balance. We suggest you start your offer at half of the balance.
Collection agencies will accept a negotiated payment. This is because the collectors only way to recoup the money they spent on your debt is; by accepting a negotiated payment or selling the debt to another collector for a fraction of what they paid.
When you agree on a settlement payment you should get in writing from them that in exchange for your payment they will not report any derogatory information to the bureaus. If you do not do this you will stop the phone calls, but you will have a whole new set of problems because of a poor credit score.
Additionally if you just pay the agency they will report the collection as paid. This is still a very negative mark on your credit report. It will not improve your score by just paying.
Again, you must get in writing that negative information is not going to be posted to your report regarding the debt. Occasionally that negative information has already been reported you must get them to agree to remove it from your report.
If you do not do this there is zero benefit from paying the collection. Additionally always pay with a paper check. FYI, you can actually use the memo line to repeat the contract regarding reporting to the bureaus, then when the check is cashed you will have a binding contract.
If you are being harassed by an agency you are not alone. Also they only can legally take so many steps to collect.. The Fair Debt Collections Practices Act says that a debt collector can not;
- Threaten arrest or jail
- Harass you with calls
- Call your place of employment (once asked not to)
- Claim to be anyone they are not
- Threaten a lawsuit (unless they are taking legal action)
- Threaten to garnish wages or seize property (each state is specific about what is legal, often a court order is needed)
- Call your neighbors or family members and speak with them about your debt
- Only call between 8am and 9 pm
- Call you if you have notified them that you will not accept calls regarding this debt.
Frequently these regulations are ignored. If you have been a victim you should report the agency to the FTC and the Attorney General. A lot of debt collectors have been fined because of violation of the FDCPA.
Additionally you can file a lawsuit against the agency and be awarded monetary damages. Make sure to keep all communications in writing in case they are in violation.
If the debt they are contacting you about is accurate then you should ask for debt validation. This should be done in writing.
Failure to do this and if you ask for validation over the phone, 99% of the time it will be completely ignored. Additionally send your letter certified mail so you have proof that they received it.
If you debt is validated and is within the statute of limitations in your respective state then you can negotiate payment. Limitations are typically seven years from the first date of delinquency.
When negotiating payment you should never pay the whole balance. This is because your debt has been purchased from the creditor for a fraction of the balance. We suggest you start your offer at half of the balance.
Collection agencies will accept a negotiated payment. This is because the collectors only way to recoup the money they spent on your debt is; by accepting a negotiated payment or selling the debt to another collector for a fraction of what they paid.
When you agree on a settlement payment you should get in writing from them that in exchange for your payment they will not report any derogatory information to the bureaus. If you do not do this you will stop the phone calls, but you will have a whole new set of problems because of a poor credit score.
Additionally if you just pay the agency they will report the collection as paid. This is still a very negative mark on your credit report. It will not improve your score by just paying.
Again, you must get in writing that negative information is not going to be posted to your report regarding the debt. Occasionally that negative information has already been reported you must get them to agree to remove it from your report.
If you do not do this there is zero benefit from paying the collection. Additionally always pay with a paper check. FYI, you can actually use the memo line to repeat the contract regarding reporting to the bureaus, then when the check is cashed you will have a binding contract.
If you are being harassed by an agency you are not alone. Also they only can legally take so many steps to collect.. The Fair Debt Collections Practices Act says that a debt collector can not;
- Threaten arrest or jail
- Harass you with calls
- Call your place of employment (once asked not to)
- Claim to be anyone they are not
- Threaten a lawsuit (unless they are taking legal action)
- Threaten to garnish wages or seize property (each state is specific about what is legal, often a court order is needed)
- Call your neighbors or family members and speak with them about your debt
- Only call between 8am and 9 pm
- Call you if you have notified them that you will not accept calls regarding this debt.
Frequently these regulations are ignored. If you have been a victim you should report the agency to the FTC and the Attorney General. A lot of debt collectors have been fined because of violation of the FDCPA.
Additionally you can file a lawsuit against the agency and be awarded monetary damages. Make sure to keep all communications in writing in case they are in violation.
About the Author:
For a free credit consultation call 1-866-246-7311. If you want information on how to deal with Midland Credit or Palisades Collection two common debt collectors visit us.
