10 Debt Collection DON’TS

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One of the most UN-pleasant jobs I ever had was working as a debt collector. I wasn’t very good at it, actually, I was very bad at it. And I know why: I knew where these people were coming from! I understood their dilemmas and accepted their excuses. I didn’t last very long at that job, but I DID accumulate some valuable information on dealing with debt collectors.

Realize is that you DO have rights when working through debt collection.

These rights are spelled out in the Fair Debt Collection Practices Act. You can take the time to read all the lawyer speak in the actual law, or you can read the Wikipedia entry which is a little more reader friendly. If you have any questions, be sure and check with a qualified attorney before you take any actions.

As distasteful as it may seem to deal with these people, you can make it worse! Protect your credit score, protect your checking account, and protect your reputation by making sure you DON’T do these:

1. DON’T avoid them. This will only make them more aggressive. It’s like running from an animal that is trained to pursue. Answer your phone calls and do what you’ll say you’ll do.

2. DON’T lie to them. Get caught lying and you can find yourself facing a lawsuit. Additionally, since you’re usually behind on payments anyway, lying will only foster their disrespect for you. You have the money they want. Tell them what you can do and when … then do it.

3. DON’T bury your head in the sand. The problem will only get worse if you ignore the situation. Face it head on. Remember, you are the one in charge, not them.

4. DON’T bounce any checks. This is akin to lying and is a quick way to get into legal trouble. Know beyond a shadow of a doubt that your check is good.

5. DON’T allow yourself to be intimidated. Eleanor Roosevelt once remarked, “No one can make you feel inferior without your consent.” Don’t let the collector bully you. You are a human being and you deserve to be treated with respect. Besides, YOU have the money. You’re in charge.

6. DON’T make a promise you cannot keep. You may be tempted to promise a payment based on an anticipated future event. But, if something goes wrong, you have egg on your face and the collector will accuse you of lying. Only spend money you have in your hands. Only promise money that you control. No promises based on an upcoming bonus, none based on someone paying you back on a personal loan, none based on anticipated overtime. Spend ONLY the money you have in your control.

7. DON’T give the collector access to your checking account. Never give the creditor your checking account number or allow them to draft money from your account. I know of situations where a collector would draft more than agreed upon, would draft more than once per month, or draft on the wrong day, causing other checks to bounce. By the time you file claims and dispute their actions, you could get behind in other bills and find yourself with a negative balance in your checking account. Not good. Only deal with a collector via checks.

8. DON’T fail to dispute a charge in a timely matter. If the collector has popped another charge on you, you must file the proper claim quickly. Don’t waste time and wait around! The statute of limitations could be very specific depending on your state and if you wait too long, you could lose your legal right to dispute the claim.

9. DON’T sell what you bought on credit if you still owe money on it. The creditor will have a much stronger case against you because equity (in a car, home, or business) can usually be better protected from forced bankruptcy or default judgment than cash. Additionally, it may appear that you were committing fraud by buying something on credit, not paying for it, and then selling it for cash.

10. DON’T settle your debt without receiving confirmation in writing. The creditor has your debt obligation in writing, you need to do the same thing if you work out a settlement. After you pay the settled debt, make sure you get confirmation in writing that the account is closed. Also, check your credit report a few months later to see that your credit report shows “closed” or “settled” or “paid as agreed.” I would recommend that you negotiate the settlement to include a “paid as agreed” entry on your report.

Always remember that you have the money they want. They only get it when you decide to send it to them. You’re in control but you should always make sure you avoid these 10 DON’TS.

Technorati Tags: collections, collector, collectors, credit, debt, fair, fraud, legal, loan, money, payment

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7 Comments so far

1. Old Indian Fella (1 comments.) October 13, 2008

   I arrived here by a circuitous route, liked what I read, and subscribed. As a person who gained ‘monetary wealth’ over my lifetime, I now spend my retirement years living according to our needs(and a few wants) and have given away most of our un-needed assets. We start the year in very good shape, but we always endeavor to exit the year with very humble means. This is our way of ‘giving back’ to those who NEED it most and will use it wisely. We’ve been doing it for 15 years now and we’re very contented. Life has been both good & bad to us, but even the hard times early on were better than some. We both grew up in money poor families, but always had the caring and instruction to get on well in life. Now it’s our turn to help others.
   We both feel much richer now that the rewards of our work will help others.

   

   Ron 's reply:
   October 13th, 2008

   #Old Indian Fella→
   I’m glad you stopped by. Thanks for sharing your story. Helping others truly does make you richer.

2. ABCs of Investing (2 comments.) October 13, 2008

   Sounds like a rough job. I think your post illustrates that a bit of knowledge of your rights will go a long way!

3. Jeff@MySuperChargedLife (23 comments.) October 13, 2008

   This all sounds like great advice. It seems to me that ignoring the situation would certainly be a bad move. I know that I have been successful in the past in working out easy payment terms with a couple of hospitals for medical bills. Arranging this type of agreement up front is easier than waiting until it goes to collections. Thanks for the tips!

4. Dee October 14, 2008

   I am a debt collector. I’m anything but aggressive. I would love to hear from other debt collects — what they must go thru at their agencies, if they walk a straight line, if they’ve ever been reprimanded for crossing the line, where they’re located. I have the means to make your voice be heard, but I have to hear from you.

   Dee
   HreAgnRBHC6@aol.com

5. Weekly Roundup - A Mouse in the House Edition | Frugal Dad October 18, 2008

   [...] 10 Debt Collection DON’TS [...]

6. LinkStuff Halloween Edition October 30, 2008

   [...] The Wisdom Journal used to work as a debt collector and he came up with 10 debt collection don’ts. [...]

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