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When a collection agency calls you, you may be caught off guard. If you are not prepared in such a scenario, you can agree to the terms and conditions set by the collection agency. You may also lose your temper in the process, which would not work out in your favor.
Knowing some basic dos and don’ts related to handling a debt collection call will help you deal with such a situation more effectively.
What should I do if a collection agency calls?
It is vital that you remain calm during the telephone conversation. When you receive a call from a collection agency, take the following steps:
Ask for documentation
At the beginning of your conversation, ask the collection agency to give you a debt validation letter. This is within your legal rights as they are required by law to provide you with this document within five days of contacting you.
Expect the validation letter to include information about the amount owed and your original lender.
Record the call details
It would be best if you had a collection item, a recorded sheet with the time and date your collection agency called, their name, and the highlight of the call.
Your collection log can be on your computer, a piece of paper, or a notebook. Such a record helps you keep track of the person calling, their organization and the debt information. It will also help you monitor the frequency of specific collector calls. A collection of call logs makes it easy to detect differences between different callers.
Keep all messages from collectors that could be interpreted as harassment. Such records may be helpful if you choose to sue them or settle the debt. You can learn more about how to deal with abusive debt collection agencies here
Negotiate the payment terms
For legitimate debt, you can try to follow some sort of payment schedule for your debt. You can negotiate the terms of your payment to a significantly lower amount.
If the debt owed is a significant amount, creditors may be willing to agree to a one-time payment of only 40%-60% of the initial amount owed. Most collection agencies actually prefer: negotiate for a lump sum payment of a smaller amount than installments.
What should I avoid during a collection conversation?
Nobody likes calls from collection agencies. They can be stressful and frustrating. Here are a few things to avoid when speaking with a collection agency:
Disclosure of Personal Information
Never give your bank account or social security number to a collection agency. Do not give details about your finances or income. Keep your telephone conversation as short as possible and ask for all written information. Some personal information that you are not allowed to provide include:
- Citizen service number
- Bank account number
- Value of your property
Make a payment in good faith
Usually a collection agency will ask you to pay a certain amount that is not included in the settlement contract. They may state that the payment is made in good faith. This payment cannot prevent the collection agency from filing a lawsuit. It also does not increase your credit history in any way.
The payment extends the limitation period. In several states, the statute of limitations begins on the day you make the final payment. With every new payment, regardless of the amount, the limitation period starts again (source: https://www.suethecollector.com/how-to-handle-collections-and-debt-collectors/). This article gives you the statute of limitations for collections by state.
Get angry quickly
You must avoid becoming hostile, yelling or using profanity. If you are the offending party in the call records, you could be disadvantaged in a lawsuit. You can also inadvertently offer the collection agency private information that you would otherwise have withheld.
If you need legal assistance to help with an abusive debt collector, find out the best way to settle your debts, or negotiate a settlement, consult an attorney. Immediately after engaging a lawyer, the debt collection agency must contact your lawyer. Simply letting someone else communicate with a collection agency can significantly reduce your stress.
This content is brought to you by Charles Britton.
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