Communicating with a collection agency can be frustrating, but you can control some of that. The key to remember is that you have rights, but you also owe this debt. Finding a way to work with debt collectors could help you to get out of that debt and move on.
Regardless of the circumstances that have led to your inability to make payments on time or as initially agreed, there are several important considerations to remember throughout this process.
The Importance of Communication
Take a moment to realize that a call from a collection agency doesn’t mean you’re in any physical danger. However, it does mean you should take a few steps to protect yourself going forward. You don’t have to take any abuse from a creditor. Good communication could work in your favor, though.
For example, if you know the debt is valid, the debt collector can help you to create a repayment plan without doing further damage to your credit score. They can also help you to pay what you owe or less than what you owe through a payment plan that works in your favor. If you don’t talk to them and ignore them, it may lead to additional actions, including wage garnishments or seizing your assets in a court judgment. That’s going to cost more and hurt your score more so.
Best Practices for Communicating with a Collection Agency
As you consider how to communicate in a way that protects you, consider the following best practices.
First calls.
When they first contact you, gather information and never state that you know you owe the debt. A debt collector must send you a letter within five days of their first contact with you, called a Debt Validation Notice, to help you confirm that you owe this debt.
Verify the information.
Be sure that the information provided is accurate. Be sure the letter outlines what you owe, the charge-off date, the date of your last payment, the data of the debt-creating transaction, and the judgment date, if any.
Set communication expectations with collectors.
If you cannot receive calls at work, don’t want text messages or social media posts, and don’t want the creditor to talk to anyone else about your debt, tell them that. Debt collectors will record nearly all communication, which can help to provide your rights in this area.
Dispute the debt.
There is almost no reason that you shouldn’t dispute the debt. Doing so forces the organization to prove that you owe the debt; if they cannot, you’re off the hook. Disputing also helps you to create a clear path forward for knowing what you owe.
Negotiating a Payment Plan
When you owe a debt to a lender, work with them to set up payment on that debt.
- Ask them to lower what you owe. Most debt collection agencies recognize they will not receive payment in full from most borrowers.
- Tell them the monthly payment you can afford, but ensure you are comfortable making it. Be realistic, but keep costs low.
- Ask them to eliminate fees and interest on the debt in the future. That can help to protect your rights during repayment.
- Don’t provide your account information. Protect yourself by requesting the debt collector send a monthly invoice to you.
Reporting Illegal or Abusive
If you are experiencing any illegal debt collection action, take action to protect yourself. Document what’s occurred as clearly as you can. Then, report it.
- Contact your state’s attorney general to report the actions. Many states allow you to report these occurrences online.
- Contact the Federal Trade Commission. You can do this at www.ftc.gov or by calling 877-382-4357.
You can also contact your debt collections attorney or a debt counselor to help you to manage this process.
Protecting Your Credit Score
Be sure that you work to protect your credit score throughout this process. Use a free credit report monitoring service and get a copy of your credit report from each of the three national credit bureaus at AnnualCreditReport.com.
If you notice a claim on your credit report from the debt collection organizations, dispute it with the credit bureaus to force them to verify the information. Work with the debt collections company to avoid having the debt reported to the credit bureaus to safeguard your credit score. They may be willing to do that if you agree to make payments and do so.
Seeking Professional Help
There are times when seeking the help of a debt counselor is best. That will help you avoid making a mistake that could end up costing you. Work with a debt collector to help you avoid debt collections and ensure they respect your rights as a borrower.