If you or someone you know is having problems with creditors or collection agencies, this is the article that they hope you never read.
Bad economic times, slowdowns at work, lay-offs, medical problems, and losing a job can put you in a bad financial way. After getting behind a couple of months the collectors will inevitably start calling and harass you.
If debt collectors are harassing you, I feel your pain, and I have walked in the same shoes as you. I’m not afraid to admit I have financial problems, I want to help others that have had to endure the same issues and abuse that I have.
It’s not the end of the world though and there are certain things you can do to lessen the harassment.
I’ve had my share of struggling with debt and dealing with creditors and debt collectors. In the past, I would get depressed over it. Of course, the idiots calling from collection agencies just don’t seem to understand that no matter what they say or threaten they aren’t going to get paid until I am able to do so. I’ve seen and heard it all, I’ve been threatened by supposed criminal lawsuits, which is of course illegal for them to do. They have tried shaming me and even intimidating me. I’ve even had them threaten to call neighbors and then have them actually do it, which of course is also illegal.
So far, all but two collection agencies that have come after me have used illegal, unethical and underhanded tricks to try to collect. So what can you do about such band behavior?
There are several things you can do, below you will find a list of things you can do and some helpful advice on digging your way out of debt.
First calm down, there is hope, being behind on your debts is only temporary if you work on getting out of debt.
The first thing you should remember above all else is to pay your necessities first (house, food, utilities, vehicle, insurance, clothing, etc). This should always come before you even consider paying debts you have fallen behind on paying. Many debt collectors will try to get you to make a payment, even when you only have enough to cover your basic needs. Don’t listen to them, pay your necessities first.
If you anything left over after paying your basic needs then divide what’s left up between the companies and people you owe. See further down this post for an illustration of how to divide money between creditors based on what you owe.
If the debt collectors are ringing your phone off the hook, there are several things you can do to lessen and even stop it. I am not sure why debt collectors think that by being abusive it is going to help matters. I’ve heard that they try to make you upset and angry because you are more than likely going to pay them something to shut them up. Don’t fall for it, all they want is to be paid and will likely do anything they can to get you to pay. They aren’t your friends, so don’t listen to them.
If possible, always record all phone calls. Many answering machines have a record function on them. Use it.
Secondly, if a collector gets abusive or starts yelling, tell them that if they continue with that behavior you will hang up, if they do then hang up. They will probably call back, if they do remain calm and answer the phone (or let it go to the answering machine), if you choose to answer the phone and they again become abusive or start yelling, calmly tells them that until they calm down and stop misbehaving you are not going to talk to them and hang up. You take their “power” away from them when you remain calm and tell them you aren’t going to discuss anything until they calm down.
If they are calling your place of employment you can write them a cease and desist calling letter, be sure to send it certified mail with return receipt so you know they got it (this may come in handy if they violate the cease and desist letter). As soon as the first call hits where I work, I write up a simple cease and desist letter (see example below) and send it certified mail. More than 95% of the collectors will stop calling after receiving such a letter. A collector can call once after receiving such a letter but that’s it, if they call more than that they are in violation of the Fair Debt Collections Practices Act (FDCPA) and you can report them to the Federal Trade Commission (FTC.gov) and file suit against them.
"I’ve had collectors violate the FDCPA by calling repeatedly after receiving my cease and desist letter. Currently one is trying to settle with me out of court (NCO Financial) for violating the FDCPA and the other three I am going to file against in court for their illegal behavior. I have all of the recorded phone conversations, photos of the caller ID and the return receipt card they signed when they got my certified cease and desist calling letter. There are 37 states allow one party (one person) consent to record a telephone call (see link at end of this article). Additionally if they are calling, your employer and you record it you may be okay as at your place of employment you have no reasonable expectancy of privacy, so it would hold up in court even if the person calling you is in a two party consent state."
I’ve also had success in filing complaints with the FTC and the better business bureau, it seems that bad debt collectors will back off once they know you will complain about their unethical practices. The FTC takes abusive collections practices seriously, so be sure to report all violations to them (
www.ftc.gov).
Write down each time a collector calls and keep track of this, keep all of the return receipts from your cease and desist letters, save those phone recordings, you never know when you will need them.
Only agree to talk to a debt collection company or creditor once every two weeks, if they call more than that, tell them that they have already called in the last two weeks and you will not speak with them again until the next two week period, then politely tell them you are ending the call.
You can send a letter to cease and desist ALL telephone calls. However, this could trigger them filing a lawsuit (not likely though on debts under $2000.00). This is a judgment call on your part. If the collector is very abusive then this may be an avenue you want to take.
---- SAMPLE CEASE CALLING LETTER ---
[DATE]
[YOUR NAME AND ADDRESS]
[DEBT COLLECTORS NAME AND ADDRESS]
RE: Regarding calls to employer [ADD ANY REFERENCE NUMBERS FROM DEBT COLLECTOR HERE]
Dear [INSERT DEBT COLLECTION COMPANY NAME HERE],
I am writing to formally request that your firm (or any agency hired by your firm) no longer contact me at my place of employment, [INSERT YOUR EMPLOYER HERE AND PHONE NUMBER(S)].
My employer requests that calls such as yours must cease, under the terms of the 1977 Federal Fair Debt Collection Practices Act, I formally demand all such calls to my place of employment cease. You will take note that this letter was mailed certified mail, so I have proof that you are in receipt of this letter should legal action against you become necessary on this matter.
Please give this matter the attention that it deserves.
Sincerely,
[SIGN HERE]
--- END OF SAMPLE CEASE CALLING LETTER ---
How to pay collection agencies or creditors with money left over after you pay your necessities.
Let’s say you have outstanding debt that equals $2,000.00 and you have $100.00 left over after you paid for your families basic necessities.
Major Credit Card $1500.00
Retail Store Credit Card $ 250.00
Retail Store Credit Card $250.00
Total $2,000.00
What you want to do is divide the $100.00 you have to pay debt with based on the percentage you owe each creditor.
Since 75% of your debt is owed to the Major Credit Card you would pay them $75.00 of the $100.00 and $12.50 to each of the other two (as they are 12.5 % of the debt, so they get to split the other $25.00 of your extra money).
Call each creditor or collection agency and tell them what you are paying and why you are paying it the way you are (the percentage pay off as outlined above). You’ll find that if you call them each time you make a payment, they will call you less. This puts the “power” back on your side. Freak them out by calling them.
If you don’t have much left after paying your necessities pay what you can on the biggest debts and the others can wait until the next time you have extra money to pay down the debts. If a creditor or collection company calls because you didn’t make a payment, tell them that you only had so much money to pay debts with and that they fell below the line this month, and that you will do your best to make a payment next month, if there is any money to do so. Take the initiative, call the creditors that you won’t be paying this month, and tell them that unfortunately there is not money to pay them this month, perhaps next month. Debt collectors just don’t know what to do in cases such as this. Mess with their heads!
Always be polite and do not take any form of abuse form them, again, if they become abusive tell them that you aren’t going to talk to them until they calm down and tell them that you are now hanging up. No one deserves to be abused, threatened or intimidated by anyone else. Don’t accept it.
Do what you have to do to make extra money to pay your debts. Get an extra job, sell stuff (after all it is only stuff, you can buy it again when you are out of debt), have a yard sale, anything to make money to pay off those debts. If you work hard, then the situation is only temporary. The faster you work to get the debts paid off the faster it all goes away.
View the list of one party (one person) telephone conversation recording consent states.
Copyright © 2008, Allen Harkleroad, All Rights Reserved