How to deal with debt collectors -3 Step Guide

If your debt is sent to the collection you might be irritated by the subsequent phone calls, mails and messages from the debt collectors.  It is very frustrating to deal with huge amounts of debt that include medical debt, credit card debt, payday loans, mortgages, and more.  These debts are constantly lowering your credit score. But if you know the right way to deal with debt collectors to negotiate on your behalf you can potentially get rid of the debt faster.

Many times, the debt collectors are hounding you to make monthly debt payments you owe.  Here’s is what you should need to know while you negotiate and deal with debt collectors. When you deal with debt collectors, you should confirm and calculate the debt you owe, calculate a realistic plan to pay the debt and propose a payment plan to the collector.  

Before you start making the payments, here is something you need to know to deal with the debt collectors:

 3 Step Guide to deal with Debt Collectors

 1. Confirm the total debt you owe

 When the debt collectors will first contact you don’t rush into the process without estimating the total amount of debt you owe. When you deal with the debt collectors the first and foremost step is to understand the terms and conditions before proceeding to the payment plan. It is important to thoroughly understand your options for paying off debt in collections.

When the debt collectors contact you, they generally provide a detailed calculation of the debt you owe in the first week. The information is provided to the user via mail or in written by the debt collection agency. This will help you gain insight into how you will carry forward with the payment plan.

Some debt collectors create the urgency to pay the balance slightly lesser than what you owe. In this way you will not be able to reach your desired goal.   At start when you deal with debt collectors do not make promises instantly to pay off the debt. First analyze the situation and don’t first handedly give the payment information the collector may use against you later. Ask for the debt information  first and then later make a call to discuss it.

2. Gather the facts and make a realistic repayment plan

When the creditor sells the debt to the third party it mostly results in multiple errors. As the record keeping is not that  proper, so the final  amount showed by the debt collectors might be greater than what you owe. As due to this issue debt collection practices results in greater complaints. The latest report of the year 2021 showed that almost 70,000 individuals filed complaints complaining that the amount of debt  they owe  is lesser than what is documented.  For fair practices deal with debt collectors on the following terms:

•  Request validation letter that must include details on  complete debt , collection company  and how to challenge the debt in the  first 5  working days of the contract
•  Collect your own records t cross verify the things. This way you remain on the safe side and  can  prevent yourself from future inconveniences.
• When you deal with debt collectors, try to keep record of the payments. It is recommended to use certified mail for proper documentation

Once this process is done you have the accurate amount of debt to pay off. Consider for the realistic repayment plan. There are some integral questions you need to answer before you make the full-fledged repayment plan

How much money can I afford to pay each month?

First, have a look at the financial obligations. Jot down the monthly take-home income. Exclude all the expenses and then estimate the amount you can pay each month.  It is important to keep some income aside for the emergency funds. Also, bear in mind that if you are paying off debt and are not making timely bill payments this might also worsen the situation.  Moreover, if you are struggling to create a realistic budget, refer to a credit counselor who can deal with debt collectors in an effective manner.

What is the total amount I’m willing to pay to settle the debt?

It is crucial to note that when you deal with debt collectors, don’t abruptly make big claims to repay the debt . If you have several debts to pay, you can ask the collector to make payments to the specific lender first.  Generally, debt collectors are not allowed to make a single payment to pay off multiple   debts you currently owe.

Try to avoid companies that charge money prior to settling debts

As dealing with the debt settlement company may involve several risks.  Some of the debt settlement companies make big claims at the start but they are not able to fulfill their promises. And vice versa some of the creditors are not willing to work with a specific debt collector.

Best Debt Relief Companies for Debt Settlement

There are a lot of Americans who are currently in debt and don’t know where to turn. So if you are considering debt settlement then deal with debt collectors in an appropriate manner. In addition, choose the reputable debt relief companies like Accredited Debt Relief and National Debt Relief.

3. Know your legal rights and how to make use of them

The Fair Debt Collection Practices Act protects you from predatory collection tactics.  As per the communication, the debt collectors are prohibited to  use  wicked language and are refrained from threatening violence. Moreover the debt collectors have no right to mislead you and show  you the wrong amount of debt you owe.  If you face such problems you can try to  deal with debt collectors through solid proofs. If things won’t work this way , you are bound to take legal action.

You have the due right to dispute the debt. if you challenge the debt within the duration of 30 days then the collector cannot ask for payments until the dispute is fully settled.  After 0 days you can still challenge the payment but in this case debt collector can demand for the payment.

If the protection under Fair Debt Collection Practices Act is violated, you can register the complaint with the CFPB. Moreover, it is important to comprehend the   federal and state protections offered in case of debt collection practices.

In a nutshell, when you deal with debt collectors, read these terms and tick-mark them to settle for the debt in an appropriate manner.

 Frequently Asked Questions