Unexpectedly, a bill slips through the cracks. Maybe you couldn’t pay it right away and put it off for later, or you simply forgot about it. Now, you’re fielding calls from collection agencies. How do you navigate this situation effectively?
It’s essential to first understand what a collection agency is. Companies you owe debt to will try to collect it for a certain period. However, if they determine that you’re unlikely to pay, they might sell your debt to a collection agency at a discounted rate. The collection agency then attempts to recover as much of the full amount as possible. This means they might adopt aggressive measures to get you to pay, though there are federal and state laws to protect borrowers from harassment and abuse.
Despite these laws, dealing with collection calls can be intimidating and stressful. Here are our top five tips to handle the situation confidently. If you are dealing with insurmountable debt, contact a bankruptcy attorney to find out what your options are.
1. Document Everything
Keep a comprehensive record of every interaction between you and the collection agency, whether it’s phone calls, emails, traditional mail, or other forms of communication. Document the time, date, and content of each communication. Not only does this provide you with a full understanding of the collection process, but it also serves as evidence if you need to file a harassment complaint.
2. Prioritize Written Communication
Your first notice of an account going to collections might come via a phone call, which can be overwhelming. Request written communication instead, as this is not only a legal requirement but also allows you to digest the details of the debt without pressure. Responding in writing gives you time to craft your response thoughtfully, and it simplifies record-keeping.
3. Demand Proof
Collection agencies are separate entities from your original creditor, and they might not always manage paperwork accurately. Request a written confirmation detailing the debt, verifying their right to collect it, and ensuring it’s within California’s four-year statute of limitations on debt collection. Confirm that the amount they’re asking for aligns with your records.
4. Investigate Your Options
A call from a collection agency doesn’t necessarily mean immediate payment. You might dispute the debt, negotiate a settlement for a lesser amount, or find that the debt has passed the statute of limitations. Remember that settling a debt might impact your credit score, though not as significantly as non-payment would.
5. Understand Your Rights
Collection agencies might bank on your lack of knowledge regarding your rights. Educate yourself about the legal limitations on their actions, such as restrictions on call times and frequency, and rules against contacting third parties about your debt. If you’re uncertain, consider consulting an experienced local attorney.
Expert Assistance is Available
If you’re grappling with collection agencies, Law Offices of Terrence Fantauzzi can help. We offer a free case evaluation and consultation with our experienced bankruptcy attorneys to discuss your rights and options. Don’t let collection agencies take advantage of you – call us at (909) 552-1238 today.