Financial hardships push people to impossible situations where they have no option but to take out debts. Ideally, one should begin payment on the date provided; however, that is not always the case and some people end up missing repayment dates. When you miss out on payments, creditors have the option to sell your debt to a third party, like a collection agency or debt collectors. The debt collectors will then follow up on the debt and attempt to get payment.
5 Things You Should Not Do When Dealing With Debt Collectors
Debt collectors work within set parameters by the CFPB to secure payment from debtors. As a debtor, staying informed on debt collection rules is in your best interest. These guidelines will provide insight into handling debt collectors when they reach out to you. Here are five things to steer away from when debt collectors contact you.
1. Do Not Ignore Them
No one likes getting calls and messages about the money they owe. Instinctively, you may be tempted to hit the decline button or ignore the call altogether in the hopes they go away. Unfortunately, this will only worsen the situation, piling up penalty fees and risking your legal rights. A debt collector could file a collection lawsuit against you in which the court can pass default judgment that gives them the power to seize property or garnish your wage in an attempt to pay the debt.
2. Do Not Disclose Personal Information
By law, a debt collector cannot request your personal information, but neither should you offer it. Your bank information, social security number and property value can be used for bank levies or wage garnishment if the collectors win a judgment against you in court. Sharing confidential information with a debt collection agency collector also puts your data at risk of suspected scams as some fraudsters pose as collectors. If the case you make payment arrangements with the collector, use a cashier’s check to ensure your private information remains private.
3. Do Not Accept Liability
The best way to respond when a debt collector reaches out to you is to request a validation letter. A debt validation letter allows you to confirm the debt without giving up your legal rights. Do not confirm the debt with the collector until you have double-checked the debt’s validity. That is the correct amount you owe and whether the debt is within the statute of limitation. Most delinquent debts past seven years are stricken from your report; however, oral confirmation could extend the statute of limitation.
4. Do Not Make Promises
You are taking away your legal rights when you promise to pay; another way of confirming accepting liability of the debt is by commuting to pay the debt. The debt collectors can report the debt as delinquent to your credit portfolio. There are many things to factor in before admission of the debt, including ensuring the debt is valid and within the statute of limitations.
5. Do Not Lose Your Calm
Dealing with debt collectors can be frustrating. They call you, leave you messages and even attempt to reach you via social media, which leaves most people on edge. Throughout your dealings with a debt collector, try and keep your calm. It will not help your case to become hostile or insult a debt collector as your words can be used against you, hurting your case.
Bottom Line
Before you develop a game plan to minimize your debt, you may have to deal with debt collectors. This can be arduous, especially when you do not know how to handle the situation. Knowing what mistakes to avoid can prevent you from landing into trouble with debt collection. Additionally, you can protect your interest and legal rights by learning how to communicate with a debt collector properly.