What You Need To Know About Handling Debt Collectors’ Phone Calls

Every day in America thousands of collection letters are mailed and thousands of intimidating phone calls are made by Debt collectors. And if you are one of the recipients of one of those phone calls or letters, your experience will be very frustrating. But you do have some protection and techniques available to you.


Part of your protection is governed by the The Fair Debt Collection Practices Act, which sets guidelines for what debt collectors may or may not legally do when attempting to collect a debt.

For example, the cannot call you before 8 a.m or after 9 p.m. In the past it was usual for collectors to make phone calls at 11 p.m., a situation that was very irritating when the family was sleeping.

Also, they cannot threaten to garnish your wages if you live in one of the states in which it's illegal, nor can they harass you with continual phone calls once you tell them to stop.

[To read the full text, see: ftc.gov/os/statutes/fdcpa/fdcpact.htm#801]

So fortunately you do have several options. For example, you can just refuse to take the call, which is what most people do. Thanks to features like Caller ID and Call Blocking you can filter the calls you receive entirely; furthermore, most answering machines allow you to screen all your calls before picking up so you can avoid a potential confrontation.

Since legal action like sending them a “cease and desist” letter may be expensive, you may want to consider other techniques first.

Obviously the ideal situation would be for you to pay the debt and get it over with, but in many cases this is not an option for people who are short on funds or lost their jobs. If you can pay some of it, you can try negotiating a lower rate or a debt reduction (or ideally both). Offer the creditor a repayment plan that you can actually afford once the debt or the interest is reduced, and follow up on your commitment.

If you do pay them every month as agreed, the phone calls will stop. Keep in mind that bill collectors are normal people who get paid for making those phone calls. So if you pay them, they will move on to others. They want to see that you are doing your best to repay your loan.

It is very important to keep a diary of all conversations that took place, and always write down the name of the person you talked to, the date, and the terms you and them agreed to. Ideally you would want to tape that call if it’s legal in your state, as long as you let the other party know that you are doing so.

Some debt collectors will argue that's out of line to be recorded. But keep in mind that most likely they are recording you too. That recording or diary can be significantly important if you have negotiated a reduction in the interest or debt or have agreed to a repayment plan.

Something that most people don’t know is that most debt collectors do have the authority to accept substantially less than what you actually owe. They do not want you to know that since they get paid a percentage of what they collect or a bonus after they collect a certain amount. So they will try to keep the amount as close to the original as possible. Knowing this can give you power when negotiating your debt, and they will take less if you are persistent. But do not threaten them and do not get upset at them; show them you want to work with them and they will help you.

Part of the agreement should involve a commitment on the debt collector's part not to put any black marks (beyond what may already be there) onto your credit report. You should take that one step further and insist they quickly report all payments you make and to adjust any amount owed.

Insist on getting the agreement in writing before you send anything more than a token good faith payment. It's a good idea to send some money to show that you are willing to fulfill your part of the agreement. But if you send too much they will have little incentive to make the effort to comply with the terms binding them.

Patience, realism and maintaining your calm during discussions will go a long way toward making an inherently unpleasant situation less stressful.

By: Rodelu

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Change your beliefs about money, and you will change your life forever. Tony Balduccio is a freelance writer and financial expert. He has been helping people get out of debt with tips and strategies that work for over two years. You can learn more about Tony at www.GetOutOfDebt101.com and www.overcome-debt.com