Debt collectors can be harsh in some situations. In such cases, the debtors must know their right and learn how to deal with the situation.
Fremont, CA: In the U.S. credit system, debt collectors are necessary. However, in some instances, the tactics used by collectors are illegal. Once contacted by a debt collector for past-due balance, the payee must educate themselves about their rights rather than going into the process blindly as it can give the collection agency the upper hand.
As the debt collectors contact the payee, they should not give in to the pressure to pay on the first contact and think of their options first. Former debt collector Ramon Khan says, “Debtors are ashamed of the money they owe, and that’s what debt collectors take advantage of.” The debt collectors create urgency and for the debtors to pay some amount. He further adds, “The collectors do not care about the money the debtor owes. They want the borrowers to pay some amount.”
To manage the situation at the first contact, the borrower must not pay or promise to pay. Further, they must not provide any information that the collector may use later. If the debtor makes a single payment—even of few dollars—it is an acknowledgment of the debt and can have severe ramifications. For example, if the debt is past the statute of limitations, it could lead to a lawsuit or wage garnishment.
It is beneficial for the borrower to know more about the process in the event of being contacted with a debt collector. To avoid the situation from getting out of control, the debtor must not ignore the collectors. They must know their rights, watch out for old debts, avoid giving too much information, watch out for past debts and scams, consider other ways to pay, and finally try to negotiate.
Ignoring the creditor’s phone calls and hanging up on them will make the situation worse, and the debt collectors may sue the debtor for the balance. A bankruptcy attorney and legal editor, Cara O’Neill says, “the creditors have the right to collect the amount and take a series of steps if not paid on time. However, collectors cannot engage in abusive, unfair, or deceptive behavior.”
In an instance, a collector breaches the debtor's federal or state rights, Cara recommends finding a consumer protection lawyer who can file a lawsuit on the borrower’s behalf. If the debtor does not want to fight the violation themselves, then they can seek help from a government agency such as the Consumer Financial Protection Bureau. Additionally, they can contact their state’s attorney general as well. The ideal practice is to pay monthly payments on time and avoid debt collectors. However, in case of late payments, the debtors must know their rights and learning to deal with debt collectors can help them pay off their debt quickly.
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