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Three Weapons When Dealing With Debt Collectors

Falling into financial difficulties often means that delinquent debt is turned over to an in-house collector or an outside agency. If you find yourself facing calls from Debt Collectors, there are three weapons in your arsenal right now that you can use.

  1. You can simply ignore the calls. Get yourself a phone that will display caller id (you may have to contact your telephone service provider and sign up for the service) and ignore numbers you don’t recognize. Some collector calls will also come through as “private caller”, and “out of area”. This is probably not a long term strategy, but it buys you time until you are ready to start negotiating. And believe it or not, often collectors will stop trying. They understand the odds of collecting money and will often move on to people they can communicate with. This also created leverage for you when the time is right to work out the best deal possible.
  2. If you are being called by a third party debt collector (not the original creditor), you can send a debt validation letter. Debt validation is a legal right provided to you under The Fair Debt Collection Practices Act. It essentially forces the collector to provide documentation that you rightfully owe the money they say you owe and it forced them to prove that they have the right to collect the debt. And if they can’t, they can’t collect, they can’t contact you, and they can’t report the collection to the credit agencies. Believe it or not, this technique is highly effective and achieves remarkable results.
  3. The debt validation letter’s little brother is the cease and desist letter. A cease and desist demand is also a right provided to you under The Fair Debt Collection Practices Act. It basically forces a third party debt collector to stop contacted you, period. The downside is that the debt can be passed on to another debt collector and you will have to go through the process again. In reality, a cease and desist letter should probably only be used once a debt has been validated.

I have good news and bad news. Often, third party collectors will ignore the law and continue to contact you and/or report a debt even after they fail to validate it or receive a cease and desist letter. Here is the good news. According to the law, each violation is punishable by a $1,000 fine. That means they can be vulnerable for thousands of dollars and there are a number of lawyers willing to take them on.

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