Tag Archive for: debt collectors

Silence is Golden – Do not talk to debt collectors – part 1

Debt collectors ask a lot of questions. How much information should you “share” with debt collectors? How many questions should you answer? It all depends on what you’re trying to do and where in the process you are. This video should help you figure out what you need to say, when, and to whom.

Should I talk to a Debt Collector? What Should I Say

If you are being called or harassed by a debt collector, one of the purposes of that debt collector is to get you to talk. Should you? This is going to depend on whether you have anything to say.

Debt Collectors Target Struggling People

As I have mentioned before, the debt collection business is targeted at distressed people. The debt collectors already know you don’t have much money, and they know you probably have other people trying to get money from you. Their job is not to force you to pay somebody—it’s to force you to pay them. Another way to put that is that they are not competing with you—they’re competing with other debt collectors. You are the football in a game between the debt collectors, the string in a game of tug of war. Does that make sense?

Silence Can Be Golden when Dealing with Collections

The job of the debt collector is to get you to pay them instead of someone else. They can do this either by annoying you so much that you pay them to get them off the phone or by establishing a sympathetic connection to you so you gladly do it for the voice on the other end of the line. Both of these methods involve keeping you on the phone and the connection open, and neither of these methods is directed at your well-being. Also, if they can get you to reveal information about your job or bank, or any kind of assets you have, they can improve their chances of making you pay against your will. So unless you have your own purpose for communicating, you shouldn’t do it.

Sometimes it Makes Sense to Talk to Collectors

What might be a good reason for you to communicate? Well, because you want something tangible from the debt collector to whom you are speaking. You could want them to reduce interest rates, waive penalties, agree not to give information on your debt to the credit reporting agencies, or any number of actual, materially beneficial things. If you’re hoping to get a friendly voice or understanding, a debt collector is the wrong person to talk to: they already understand everything they want to know about your situation. Talk to someone else for that.

Negotiate—And Get It in Writing

Don’t be afraid to negotiate. You can ask for anything from them, and in most cases the debt collector could give you anything you might request. So be bold. If you want to settle for ten cents on the dollar, you can ask. They may laugh—but laughter is just a part of the negotiation and doesn’t mean they won’t do it. And if they agree to do anything, you must get the agreement in writing. In a practical sense, it doesn’t count if you don’t get it in writing. You won’t be able to prove it, and in some cases an oral “modification” would not even be legally recognizable even if you could prove it. It must be in writing.

They’ll want something in return. An immediate payment, an agreement to pay by a certain date, something. You can agree to this if you can do it, but you’re spinning your wheels if you cannot, so it makes sense to limit your promises to things you’re sure you can perform. Don’t over-commit, as this may negate the agreement you reach and will almost certainly increase the number and hostility of the phone calls you are receiving. Remember that the debt collector is keeping records of everything you say (so don’t tell them where you work or bank).

Stop Talking to Collectors When You’ve Said What You Need to Say

And when you run out of reasons to keep talking to the debt collector, make sure that you actually stop talking to them. There is always a price for anything you say – you’re giving them free information that they will use to decide to sue you. Sometimes talking to them is worth that price, but if that changes, you should feel no obligation to keep talking.

This is part 1 of this article. Click here for part 2.

Seven Steps to Take when Sued for Debt

Three Things the FDCPA Makes Illegal

The Fair Debt Collection Practices Act (FDCPA) is a source of many protections against “unfair” debt collection practices. It enumerates many of these practices but leaves room for more general use of the law, too. This article discusses three specific violations as examples of what the law can do.

The Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) is a source of many protections from ruthless debt collectors for people who owe money. As I often point out, what makes the Act so powerful is that, in addition to making certain specific actions illegal, the FDCPA also more generally makes <i>any unfair, oppressive or deceptive collection practice illegal.</i> At the focus of this article, however, are three specific forms of communication designed to embarrass debtors

Debt Collectors Must Identify Themselves to You

Debt Collectors have particular rules when trying to find you to bug you for money.

Under 15 U.S.C. Section 1692b,  a debt collector looking for a debtor must identify himself  by name but not mention his employer unless specifically requested. He cannot state that the consumer owes any debt, and he cannot communicate more than once with any person unless requested to do so or unless the debt collector reasonably believes that the earlier response of that person was erroneous or incomplete, and the person now has correct or complete location information.

This portion of the law was obviously intended to end the practice of collectors harassing and annoying the people around the debtor for purposes of damaging relationships and creating social pressure on the debtor.

Debt Collectors Cannot Communicate at Unreasonable Hours

Collectors are not allowed to communicate with consumers <i>“at any unusual time or place”</i> or at a time or place known to be inconvenient to the consumer. Unless the debt collector actually knows that the consumer has unusual hours, he cannot call before 8:00 a.m. or after 9:00 p.m., local time of the consumer. 15 U.S.C. Sec. 1692c(a).

If you are being contacted at work, therefore, you should tell the collector that this is “an inconvenient time and place” for communications. It is also specifically illegal for a collector to call at place of work if he knows or has reason to know that the employer prohibits the consumer from receiving personal communications. If you work on a late shift, you should tell the debt collector what hours are inconvenient to you. It obviously makes sense to communicate with the debt collector in writing,  although the law doesn’t require it, and to make records of any communication that comes outside of the specified hours.

Debt Collectors Cannot Communicate with Third Parties Except under Limited Circumstances

Collectors are not allowed to talk to other people in connection with their collection efforts other than as specifically allowed (regarding finding you) unless you give your prior consent, or unless a court gives that permission. However, they are permitted to talk to your attorney, a consumer reporting agency, and the creditor and its attorney. The big exception involves “post-judgment judicial remedies.” If the debt collector obtains a judgment, it may seek garnishment of wages or bank accounts, and it is permitted efforts that are “reasonably necessary” to obtain these remedies. 15 U.S.C. Sec. 1692c(b).

I believe this section prevents debt collectors from harassing people who refuse to give them information about your whereabouts or to cooperate in other ways. Again, the prohibition exists to prevent the wanton damage of a consumer’s relationships with other people.

Your Right to Sue Under the FDCPA

If debt collectors are engaging in any of the above-mentioned prohibited acts, they are violating the Fair Debt Collection Practices Act, and you can either sue them for it or, if they have filed suit against you, make a counterclaim against them.