What to do when the debt collector calls?

Imagine that it’s nearly 8 p.m. and you are sitting home with your family and watching TV when the phone rings. You answer and the voice on the other end tells you that the purpose for his call is to collect a debt. You owe, for example, $5.000 to your credit company. If you don’t cover your financial obligations, he threatens to arrest you. What can you do in this situation? 

With the country’s economy now officially in depression, it becomes all the more difficult to stay on top of your personal finances. Many people have fallen behind on their loans taken out in economically kinder times. When that happens, it’s just a matter of time before debt collectors start calling. 

There are hundreds of debt collection agencies out there. Some of them are highly professional but the others can harass people. You have probably heard numerous stories about threats, third party contact and even personal appearances at front doors by debt collectors. 

Keep in mind that there are laws that debt collectors are required to follow. Their knowledge is your power when it comes to defending yourself. The Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using unfair, abusive or deceptive practices in their work. Although you have a debt, a collector should respect your privacy.

According to experts, one of the most common reasons people feel compelled to pay debt collectors is the lack of knowledge what collectors are allowed to do. Most fears are unfounded. There are several tips that will make it easier to deal with collection agencies:

•    Open a file and write down dates and times of phone conversations, notes of conversations along with the name of the debt collector. Keep copies of correspondence you send, as well as those you receive including envelopes. Use certified mail and return receipt when you are sending documents to a collection agency. 
•    Ask for proof of the debt. Every debt collector must send you a “validation notice” informing you about all details of your debt within 5 days after they contact you. This notice should also include the name of your creditor, proof that the debt is yours, proof that the collection agency owns or is entitled to collect the debt and what to do if you think that the debt is not yours. 
•    Don't ignore a collector even if the debt is not yours. Otherwise, he can continue to call you or he can even file a lawsuit against you. It can cost you lots of time and money in the long run. 
•    Ask for proof that the debt is not past your states statute of limitations. Depending on the age of the debt and the place where you live, the debt may no longer be collectible. These statutes are usually 4-5 years.
•    Keep in mind that debt collectors have the right to contact you in person, phone, fax, or mail. However, they may not contact you at inconvenient times or places. Unless you agree, a debt collector may only call between 8 AM and 9 PM. He also may not call a person at work if it is known that they are not permitted to receive such calls.
•    If you can negotiate a repayment plan, ask the collection agency to send you the terms of the plan in writing. You may also write a letter that explains your understanding of the negotiated repayment plan. It will protect you if there are problems in future.
•    No matter what a debt collector says, an unpaid bill is not the most important debt you have to pay this month. Will you have money to buy food or pay for utilities? Don’t make promises to pay bills that you know you can’t afford.
•    If you want the debt collector to stop contacting you, you need to write a letter telling them to do it. Even though you are still responsible for the debt, collectors can no longer contact you. However, they have the right to sue you to collect the debt. 
•    Finally, you may need the assistance of a consumer lawyer. Make sure that the attorney is a member of the National Association of Consumer Advocates and is an expert in the Fair Debt Collection Practices Act. If you take this step, then the collection agency must go through the attorney rather than you.