5 Essential Tips: What To Do When A Debt Collector Calls

With high unemployment rates and unprecedented indebtedness

, an increasing number of Americans are finding that they're on the receiving end of debt collection calls. And, because debt collectors are having a difficult time meeting their quotas, an increasing number are resorting to hardball tactics that put fear into the hearts of consumers.

If you've been receiving debt collector calls, you may not know what to do or where to turn. If that's the case, you're not alone. Here are five tips to help you survive the experience.

1. Answer the phone. It's very tempting to proverbially bury your head in the sand when you get behind on your bills. In fact, it's human nature. But as much as you might want to avoid this unpleasant experience, you should answer the phone when a debt collector calls and open the mail - even if it's from a debt collection agency. If you are in avoidance mode, you won't know if and when a debt collector is planning to take you to court. If that happens, you could be on the receiving end of a legal judgment and have your wages garnished.

2. Document everything. Every time you receive a call or written communication from a debt collection agency, write down the date, time, and what was said. Most consumers don't know that the federal Fair Debt Collection Practices Act regulates the behavior of third-party debt collectors. If a collector crosses the line into illegal behavior, you'll want to have documentation to prove it.

3. Don't make hasty promises. While it's tempting to tell a collection agency whatever they want to hear so that they'll stop harassing you, it's important that you think things through before you speak. If, for example, you agree to a payment plan that you can't afford, you'll wind up in even more hot water. If you can't pay the bill, you simply can't pay it. If you can make payments, offer only what you can truly afford - then get the agreement in writing.

4. Ask for substantiation. According to the Fair Debt Collection Practices Act, within five days of contacting you, a debt collection agency must send you information via the mail. The letter must outline your rights to dispute a debt. You have 30 days to dispute a debt if you think it's not yours. Even if it is yours, that 30-day window can buy you the time you need to formulate a plan. So ask the agency for validation of the debt. They're not allowed to contact you until they provide proof that you owe the money.

5. Know your rights. Consumers often fall prey to abusive debt collection practices because they don't understand their rights under the Fair Debt Collection Practices Act. Taking the time to understand your rights will empower you and prevent a debt collector from kicking you while you're down.

by: Sergei Lemberg

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