How to Deal with Debt Collectors

Usually, Debt collectors are just doing their job: trying to get you to pay the money you owe them. In some circumstances, however, they break the law. Here are common problems:

  1. Threatening to send you to jail. They can’t send you to jail for not being able to pay a debt, unless maybe it’s back child support, or restitution on a criminal fine, but debt collectors don’t usually collect these types of debts. It is illegal to threaten imprisonment for failing to pay a debt in most states, anyway.
  2. Using abusive or threatening language. This is likely a violation of the Fair Debt Collection Practices Act and Iowa’s Uniform Consumer Credit Code.
  3. Calling at unusual times (after 9:PM, at night, for example).
  4. Calling your friends and relatives and discussing your debts with them.
  5. Calling you at work, after you have told them not to.

Here’s how to deal with debt collectors:

  1. Be polite. Hey, they don’t have the world’s greatest job, you know!
  2. Ask them for their name and phone number, right away. You have a legal right to know the name of the company. If this is a debt collection agency, ask them for the name of the underlying creditor. You have to know this information, anyway. Knowing their name, the company’s name, and their phone number usually stops “abusive” collectors, anyway.
  3. If you dispute the bill, ask them to mail you proof of the bill.
  4. Tell them that “this conversation may be recorded.” It is illegal in Illinois to record phone calls without first advising the other side that they are being recorded. It’s like “wire tapping.”
  5. Talk to the debt collectors about other payment arrangements: can you pay in installments? Will they take $50 per month? Even if they claim they won’t tell them that this is what you are sending them and then do it. Most collectors have been lied to so often by debtors that they just do not believe you. Money is a great convincer!
  6. At work. Tell them to please do not call you at work. If they do so, after this, they may be in violation of the Fair Debt Collection Practices Act. Put it in writing and send it by certified mail.
  7. Write a letter. Federal law requires collection agencies to stop contacting you (though they may then sue you), if they receive a written request from you. It is a good idea to include information in the letter as to why you cannot pay (“I am out of work, I am disabled, I have cancer, etc.”). If they know they cannot get money from you, they are less likely to sue you. The letter should be sent certified and you should keep a copy. Here is a suggested format:

    [name and address of collection agency]
    [Your name and account number]
    Dear Agency,


    I am writing to request that you stop contacting me about my account number ____________ with [name of creditor] as required by the Fair Debt Collection Practices Act under 15 U.S.C. Section 1692c(c). This letter is not intended as an acknowledgement of the debt, in any way. I will take care of this matter, when I can. Thank you for your assistance.


    Sincerely,   [Your name]

  8. Unlisted phone number. Honestly, some times I tell my clients that the best investment they can make is paying the $20 to get an unlisted phone number! If you receive mail from collection agencies, please save it: you may need it to file bankruptcy!
  9. Do NOT send post-dated checks and do NOT give them your bank account, ever! It is illegal to ask for post-dated checks and BAD things can happen when you start handing out your bank account numbers. If they can’t wait for your payment, then they can sue you.
  10. If you intend to file bankruptcy, I recommend you tell them. They will usually ask for a name of an attorney. They will call that attorney. If you have not seen that attorney, they will call you right back. Until you pay at least a small retainer ($100 is recommended), they will probably not stop calling you. We recommend you come and see us, right away, and at least put down a retainer.
  11. If you feel that your legal rights have been violated by a creditor, get their contact information while you are talking to them, write down the date and time they called (keep a log of all such calls), and contact an attorney, today. You may be able to sue them. You may also report them to the Federal Trade Commission (FTC, Bureau of Consumer Protection, Washington, D.C. 20580).
  12. Whatever YOU do, do not make any threats to collection agencies, do not be rude, or offensive, and do NOT lose your cool. As you might guess, that is what some people want you to do: lose control. If you stay in control, you will always win.
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