Posted: October 8th, 2009 | Author: Joe | Filed under: Debt, Tips | Tags: debt collector, Fair Debt Collection Practices Act, getting out of debt, Tips | 1 Comment »
Being in debt is never a happy experience, but it can be down right detrimental to your health, wealth and happiness if that debt goes to a collection agency. Here’s what you should know about dealing with debt collectors.
Figure out what you’re dealing with.
The first thing you want to do is determine whether the debt is really yours, and what the particulars are.
1. Just the Facts, Ma’am.
Take a page from the fictitious police detective Joe Friday of T. V.’s Dragnet and get the facts. By law, the collection agency must provide you with the following in its first letter to you:
- The Name of the creditor
- The amount of initial debt owed
- Details of any penalties and interest that have accrued
- An explanation of your rights
Be sure to request a written letter detailing these if the collector calls you.
2. Make sure it’s real.
If you don’t recognize the debt, or the creditor you can and should write a letter disputing the claim. Include copies of any documents that support your side of the story. Be sure to send the letter by certified mail and request receipt. The burden is on the creditor to prove you owe the debt, and if they cannot then they must cease and desist.
If it’s real and it’s really yours, then step up and deal with it.
If the debt really is yours, then it is your obligation to pay it. But that doesn’t mean you need to be victimized.
3. Don’t stand for harassment.
Just because you owe a creditor money does not allow them to harass you. Collection agencies are not allowed to call you between the hours of 9PM and 8AM. They are prohibited from using abusive and threatening language. Furthermore, if you prefer not to be contacted by phone at all, you can request that all future contact be made in writing – and if that request is made by your lawyer, then the collector must communicate exclusively with him from that point on.
4. Craft a plan.
Work with the collector to develop a payment plan. Make it realistic – if you promise something you cannot deliver, and the claim goes to court and you lose, you could have your wages garnished.
Don’t be abused.
If the debt is yours, and you’ve tried the tips outlined above and the collector is still harassing you, it’s time to get tough.
5. Turn them in.
If all else fails, and the collector is still harassing you then report them to the FTC. The Federal Trade Commission is responsible for enforcing the Fair Debt Collection Practices Act protects consumers from abusive and annoying practices of 3rd party debt collectors. Also contact your state attorney general’s office.
6. Sue them.
If all else fails, and they are clearly in breach of the protections to keep you safe from harassment, then you can take them to court. You cannot, however, sue them if they follow protocol on a valid debt, only if they are threatening and harassing or the debt is clearly not yours. To find a lawyer, check out National Association of Consumer Advocates website
The absolute best way to get rid of debt collectors.
7. The nuclear option.
The 100%, tried and true method for getting debt collectors out of your life once and for all is to pay off your debt or avoid it entirely. It’s that simple. If you never want to deal with the often sub-human species known as the debt collector, avoid debt whenever possible and pay down the rest in a timely fashion.
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Posted: June 29th, 2009 | Author: Joe | Filed under: Debt | Tags: Credit Cards, Debt, getting out of debt | 4 Comments »
We’ve been hearing a great deal in the news lately about debt. I know a lot of people are in various kinds of debt. Common causes highlighted by the media are the death of a family provider, job loss and medical emergency. I suspect this is because those causes are very dramatic. But what about more mundane and widespread causes?
What about lifestyle creep?
That’s how my wife and I found ourselves in over $12,000 of credit card debt. It happened before we knew it, and once we had a minor medical emergency (sick pet) we realized how bad things were.
Eventually we resolved to take care of our lifestyle issue and dig ourselves out of the debt hole we dug.
So, there you have our problem: Lifestyle creep. What’s yours?
Also, that was mostly credit card debt. We also had car loans, a mortgage and student loans. So, what kind of debt do you have? Is it student loan debt, tax debt, credit card debt?
I’m interested in a general idea of the kind and cause of debt of my readers – even if you’re out of debt now. It’s ok, you can use a fake name and we won’t know. 
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Posted: March 19th, 2009 | Author: Joe | Filed under: Credit, Debt, Scam | Tags: Debt, debt settlement, getting out of debt, scams | 10 Comments »
It’s a common scenario. You find yourself over your head in debt and see an offer like the one pictured here, promising to get you out of debt, fast and easy! Most debt settlement companies are little more than a scam.
The plan is that you enroll in the settlement service for a fee. You then pay the settlement company a monthly fee, with the understanding that the company will in turn, negotiate either a smaller payment or smaller overall amount to be repaid.
Unfortunately, many debt settlement companies tell you to stop communicating with and sending payments to your creditors while you make payments to them. This is, in effect, diverting your debt payments from your creditors and sending them to the settlement company.
This simply causes you to rack up interest and pile on late fees, all the while the settlement company collects a monthly payment.
So, is debt settlement a good idea? For most people, no. In the worst case, debt settlement is a scam. In most cases, debt settlement is just not a good idea.
The reason is that you can do for yourself what the settlement company promises. Call your creditors and negotiate. This is especially effective in the current economic climate. Creditors are taking huge losses, and will make meaningful compromises to get at least some of what you owe back. Tell them you simply cannot pay back what you owe, or at least not at the current monthly payments. Negotiate for a lower payment, or overall outstanding debt amount.
However, some people are so far gone that debt settlement is the only way to go. If you are one of these people, be sure to find a nonprofit credit counselor through National Foundation for Credit Counseling. Their services might be free, but they should cost no more than $25 enrollment and $50 monthly fee.
You may also want to check out how I dug myself out of over $10,000 in debt in 7-steps.
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Posted: November 24th, 2008 | Author: Joe | Filed under: Debt, Sponsored | Tags: Debt, getting out of debt, Sponsored | No Comments »
Debt is never a good thing. Sure, there is bad debt and not-so bad debt (like mortgages and student loans), but generally speaking, it’s always best to eliminate your debt when you can and avoid it in the future.
Debt is especially bad in times of economic distress. Recessions often lead to job loss and lack of raises which result in less income. Less income may mean less ability to pay off your current debt or it may make it harder to live within your means, causing you to rack up more credit card debt.
Whatever your situation is, it’s best to face up to it and change your behavior to avoid being in the same situation again in the future. But simply changing your behavior will not always be enough to get you out of debt. Some times you need a Debt Management Program.
If you find yourself in need of such professional assistance, you may want to check out DebtGuru.com. DebtGuru.com is the website for American Credit Foundation®, an IRS 501 (c)(3) non-profit consumer credit counseling organization.
DebtGuru provides debt restructuring and credit card debt consolidation, which doesn’t change who you owe money to and it is not a new loan. DebtGuru provides a counselor to work with you on a personalized repayment plan that can eliminate your debt in up to 1/3 of the time it could take otherwise. Once you agree to be part of the management plan, they will contact your creditors and negotiate the best repayment situation for you. That may me lower payments, lower interest rates, lower total amount owed or all of the above.
In my opinion, it’s best to avoid getting yourself in a position where you need such a service. But we sometimes find ourselves in situations not of our design. DebtGuru may be your solution for just such a situation. Hey – they offer a free, online quote so why not check them out?
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