This is the third installment of a three-part weekly series featuring Next Steps When You’re In Credit Trouble. This week we tackle the question: What should you do if you are contacted by a collection agency?
While everyone faces financial difficulties from time to time, getting behind on your bills is never a good idea. If you are just one month behind on your bills, check out the first article in the series: what should you do if you can’t pay your credit card bills this month? You’ll see how to minimize the damage if you miss a payment one month, including making the minimum payment if that’s all you can afford. If you can’t even afford that much, your creditors may be able to help if you reach out to them promptly and with the right approach. Not sure what to do? It’s all in article one.
If you find yourself several months behind on your bills check out the second article in the series: What should you do if you are several months behind on your bills? Starting with prioritizing your bills to how to contact your creditors, where to go for professional help and more, this article is a great resource for anyone who finds themselves several months behind on bills.
But once creditors start contacting you, your credit is definitely in critical condition. Here’s What You Should Do if You Are Initially Contacted by a Collection Agency.
6 Easy Steps To Take When A Collection Agency Calls
The good news is that when dealing with debt collectors, you have rights thanks to the Fair Debt Collection Practices Act. Here’s what you need to know when a third-party bill collection agency contacts you:
First, get it in writing
Within five days of contacting you, a collector must send you a written notice telling you the amount of money you owe, the name of the creditor and what action to take if you believe you don’t owe the money, according to the debt collection act. Until you receive this written notice, do not engage in conversation with anyone looking to collect a debt.
Write your own letter
If after receiving a collection agency letter you don’t believe you owe the money, it’s time to fight back by writing back. Yes, a simple letter sent directly to the collection agency within 30 days and stating you do not owe the money will stop debt collectors cold, at least for a while.
Collectors have rights too.
The Fair Debt Collection Practices Act gives the collector some rights, too. A bill collection agency can renew collection activities if it provides you with proof of the debt, such as a copy of the bill you owe. So…
Document, document, document.
This is the time to get organized and keep record of phone calls and messages related to debt collection. Keep a file with notes from phone conversations and copies of all written correspondence to and from the collector. Record the day and time of every collection call, the collection agency’s name, the amount it says you owe and a summary of the conversation. Save voicemails and messages on your phone system. A paper and digital trail can prove invaluable if a collection agency breaks the law.
Say little, listen close.
While on the phone with a collection agency, make sure to say as little as possible that could harm your case. Remember they are evaluating your ability to pay. Listen closely and keep track of the details of the conversation. Stand firm. Keep it short.
Know your rights.
When it comes to collection calls, the law dictates what a bill collection agency cannot say or do, including:
- Using abusive or obscene language.
- Harassing you with repeated calls.
- Calling before 8 a.m. or after 9 p.m. unless you agree.
- Calling you at work if you have asked them to stop.
- Talking to anyone but you or your attorney about the debt.
- Misrepresenting the amount of your debt.
- Falsely claiming to be an attorney or a law enforcement official.
- Falsely claiming to be a credit bureau representative.
- Threatening to sue unless they actually plan to take legal action.
- Threatening to garnish wages or seize property unless they actually intend to do it.