Tips on Dealing with Bad Debt Collectors and Protecting Your Credit

If you’ve ever faced financial trouble and got behind on your bills, you know that debt collectors are more than eager to collect that money. Some of these people cross the line. They’ll threaten to have you arrested, try to illegally seize your money and generally intimidate or harass you. Complaints to the Better Business Bureau are rising quickly. The FTC say that they have received more complaints against bad debt collectors than against any other industry every year for the past three years. That’s just insane, and unacceptable.

Some of the most commonly heard complaints from people include vulgar language, trying to inflate the amount of money owed by the consumer, sharing the debt information illegally with person(s) not entitled to it, or trying to collect extra fees. Thankfully, not all debt collectors act this way. You need to know your rights. Many people don’t, and the “bad” debt collectors know it. They take advantage of that in order to intimidate and browbeat you. Here are a few of the rights that every consumer should be aware of:

• A debt collector cannot call you before 8 a.m. or after 9 p.m., unless you agree.
• You cannot be contacted at work if the collector knows your employer disapproves.
• If you don’t want to hear from a debt collector, write a letter telling them to stop. By law, they have to. Remember though… the debt won’t go away and you can still be sued.
• The debt collector can contact your attorney — if you have one. If not, your friends and family can be asked about how to get in touch with you.
• A debt collector can’t misrepresent the amount of your debt.
• A debt collector also cannot use profane or threatening language.
• Debt collectors can’t say that they will put a lien on your property or file a lawsuit unless the agency really means to do that and it’s legal.
• Collectors can’t legally claim federal benefits, such as Social Security or your retirement accounts, like your IRA or 401(k).

Once a debt collector has made contact with you by telephone, they have to allow you to receive a copy of the debt in writing. It must state who you owe the money to originally (and currently, if the debt has been re-assigned), and what action you can take if you contest the debt. If a debt was incurred during a previous marriage, you may be liable for it anyway, unless your divorce papers specifically state that your ex must pay that particular debt.

If you’ve been called by a debt collector and think you don’t owe the money, then you have to write a letter stating you are not liable within 30 days, giving specific reasons why you feel this way. Once they receive your letter, they have to send proof. NEVER be forced to pay a debt you don’t owe… just to get rid of the harassment.

There are certain debts that have a “time limit” to them. This would be a limit as to how long debt collectors have to LEGALLY collect the money. This can range anywhere from 3 to 15 years, depending on the type of debt. You can check your state’s government website to find out about statutes in your state, or take a look at Naag to find the answer.

There are times that debt collectors will attempt to collect debts that have run through the time limit. It’s called a “zombie debt”. The paper trail is still out there, even though you technically no longer owe the money. Make sure you do not accept new credit with that same creditor. Once you do, the time limit is gone, and they can and will come after you for the old debt… unless you have had it forgiven in a bankruptcy.

If you think you’ve been harassed unnecessarily or illegally by a debt collector, do something about it. You can file a complaint with the FTC. You should also contact your state attorney general’s office. You can also sue a debt collector within one year of the time they broke the law while attempting to collect a debt.

Keep in mind, there are a few types of debt you can never get rid of. There are no bankruptcies allowed, nor “statue of limitations” for past-due taxes, child support and student loans. Those debts will follow you everywhere, until they are paid.