Have you been on the receiving end of collection calls or collection letters due to delinquent debt payments? It is stressful enough to be dealing with debt. However, constantly hearing from your debt collection agency can also be both tiring and intimidating. If you’re a borrower who is guilty of having past-due bills, you don’t have to endure such harassment. There are ways to help you attain debt-relief and consumer protection against such demanding phone calls.
Northwest Debt Relief Law Firm has compiled a list of how you should respond when creditors collect a debt. Moreover, if you intend to file for bankruptcy, it is best to be aware of any legal action that will prevent collection agents from harassing or calling you for an old debt.
What To Do When Creditors Demand Payment
Keep calm. Constant reminders of your debt and threats of lawsuit or wage garnishment can make any debtor angry. However, even if you want to scream, become hostile, or use profanity, remember that such actions can lead to a court action declaring you as abusive and ruling in favor of your loan collector.
Review the details of the debt. Is the debt legitimate? When a lender contacts you by phone or sends a collection letter, you should first check if the debt is truly under your name. There are many collection scams so you should immediately alert any collector if those debts owed are not yours so that they may voluntarily stop asking you for repayment.
Report suspicious activities. If you believe that there’s something suspicious about the timing of collection, refrain from giving your personal information such as your income, bank account details, Social Security number, or value of the properties you own. This information may be used by scammers, an identity thief, or by a legitimate collector to receive a court judgment against you. If the debt is validated, you should still check if the statute of limitations has passed. Avoid saying anything that might reaffirm the debt.
Learn your rights. The Fair Debt Collection Practices Act or FDCPA ensures personal and financial protection to consumers by prohibiting debt collectors from harassing borrowers or using abusive tactics. It also creates a limit on when and how your collector can reach you and who they can ask about your debt. If a lender violates any of these, you should seek legal advice.
Be honest about your financial situation. If there was no way for you to repay, tell this to your collectors. Although this does not remove your creditors’ right to collect, it may point them towards other customers or even prevent your case from being escalated to litigation. To prevent being harassed, you should also avoid hiding from collection agents. Hiding your phone number or home address will only make them send more demand letters or even contact your employer or friends just to get to you.
Keep a record of the calls from the collection agencies. This will be useful in your defense in case the lender decides to sue you for unpaid balances. Make sure that you have a written record when bill collectors call you: take note of the date, time, name of the person you spoke to, the message, and even profane language used (if any). A collections log helps in debt management because it can track the frequency of creditor calls and even catch inconsistencies in the collection process.
Request collectors to stop communication. The Debt Collection Act gives you the right to submit a written request for a debt collector to stop calling you. When they receive your request in writing, they are legally obliged to comply, with certain exceptions. But before you send a “cease communication” letter, consider how this may affect you when you negotiate a settlement or if you wish to update your debt status. State law dictates that a collector who receives such a letter is prohibited from doing any collection effort except when filing a complaint or lawsuit against you. A bankruptcy lawyer can help you understand your state law better when you request a free consultation.
Avoid small payments showing good faith. It can be tempting to give a small payment just to stop the barrage of calls, avoid the threat of being sued, or risk your credit score. But if there is no settlement agreement, this can make things worse because it extends your status of limitations. Depending on your state, your time limit to pay a debt usually resets on the date you gave your last payment.
Don’t make empty promises. Refrain from making statements like “I will follow the payment plan beginning next month”, or “I will catch up on my bills by this date” as this will only renew the statute of limitations for your loans.
To avoid legal complications, do a tele consultation with our experienced legal professionals at Northwest Debt Relief Law Firm. If you need help in dealing with creditor harassment, preparing a written notice to stop harassing phone calls, filing a lawsuit against a collections agency, or uncovering a debt fraud, talking to our bankruptcy attorneys will help you sort things out and regain financial freedom. Call us now!