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Six Ways to Handle a Difficult Situation with Creditors

If debt collectors have started to call you to ask about unpaid credit card bills or to collect past-due debts, there are certain practices you can follow to navigate some of the tricky situations you may encounter.  

While it is best to avoid debt collectors in the first place, that’s not always possible. Here are six difficult situations you might experience when dealing with debt collectors and advice on how to act in each situation.    

#1: Know Your Rights

Under the Fair Debt Collection Practices Act (FDCPA), consumers are afforded certain rights. The FDCPA outlines what debt collectors are and are not permitted to do when contacting consumers. For instance, debt collectors may not harass you with phone calls, threaten you, or use profane or abusive language when communicating with you. If a debt collector acts inappropriately, you can and should report the behavior to the Consumer Financial Protection Bureau or your state’s attorney general’s office.

It is also within your rights to request, in writing, that a debt collector stop contacting you. If you do this, the debt collector is legally required to cease communication with you. While this doesn’t mean that your debt will go away, it will protect you from further uncomfortable or contentious communications.

#2: Beware Potential Scams

Occasionally, a scammer will pose as a legitimate debt collector to try to extract money from unsuspecting victims. A few key things will tip you off to a debt collector scammer. First and foremost, they’re usually very aggressive on the phone. They might demand immediate payment instead of working with you to develop a payment plan over time or they will only accept credit card payments (real debt collectors will accept any form of payment). Further, they probably won’t have an online site where you can verify their information. In today’s digital culture, a lack of an internet presence is a red flag.

#3: Memorialize All Communications in Writing

Any time a debt collector informs you of a debt you owe or relays some piece of financial information about your debts, you should ask for that information to be provided in writing. Usually, debt collectors will contact you on the phone to inform you of what you owe. They are required to tell you both the amount you owe and the name of the creditor you owe it to. While they are also supposed to send you this information by mail if they do not specify the details on the phone, make sure you ask for the information in writing no matter what. This can help avoid any misunderstandings about your amount owed.

Additionally, if a debt collector agrees to settle your debt for anything less than the outstanding balance, get this information in writing. Again, this will help avoid any misunderstandings in the future and will protect you if the debt collector backs down from his promise.

#4: Negotiate

Settling your debt for a lower amount than your outstanding balance is one form of debt relief. To settle your debt, you must navigate a negotiation with your debt collector. When you begin to negotiate, one tactic is to offer to settle for a lower amount than you think they will accept. Ultimately, you might come to an agreement with the collector to settle your debt for an amount somewhere in between your original offer and theirs. 

#5: Don’t Ignore Their Calls

Once a debt collector contacts you, the best course of action is to respond to its calls and letters. The worst thing you can do is ignore them, as the debt isn’t going away and neither are the debt collectors. Not only will the process be more pleasant if you don’t ignore a debt collector, but your willingness to respond makes it more likely they will agree to a debt settlement as a form of debt relief. Additionally, if you ignore the debt for too long and the debt collectors cannot get in touch with you, they might sue you for the balance, which will end up costing you more in legal fees, not to mention energy spent dealing with the lawsuit.

#6: Hire a Debt Relief Company to Assist You

If you’re in a difficult situation that you cannot handle on your own or if you are feeling overwhelmed by the process, a debt relief company like can assist you in figuring out the best course of action.

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