Debt collectors can be intimidating and relentless. They call you numerous times a week and send increasingly threatening letters. Some debt collectors have been known to show up at someone’s home to “delivery notice” of further legal action. Debt collectors do not care about how hard you have worked to pay your past due debts. They don’t care what caused your financial hardship.
Dealing with debt collectors is frustrating, so many people ignore the debt collection letters and try to block debt collection calls. However, that is not the way to deal with debts you cannot pay. Ascend is here to help you deal with debt collectors before they call your family and friends or file a debt collection lawsuit.
What Is Your First Step When Dealing with Debt Collectors?
Four things you need to do right now:
1. You need to understand your rights under the Fair Debt Collection Practices Act.
2. You must prioritize what must be paid.
3. Make a list of the debts you owe, including which debts are in debt collection.
4. Review your options for getting out of debt.
5. There is an 11 word phrase you can use to stop debt collectors immediately. This will give you time to consider your options. You can take this further by asking them not to email, send you mail or text message you.
6. You can use this debt options calculator to help you understand your options/plan of attack when you cannot pay.
What Can Debt Collectors Do and What Debt Collectors Can’t Do?
The lender or creditor may send the account to collections when you don’t pay a debt. A debt collector is a third party that attempts to collect the debt for the original creditors. The creditor pays the collector a fee for their services. A third party purchases the debt for a discounted price in some cases. The third-party “owns” the account and may proceed with collecting the debt.
Most debt collectors begin by calling you and sending you letters. If you listed family members or friends as additional contacts, the debt collectors might contact those individuals to ask them if they know how to get in contact with you.
What Debt Collector Can Do
- Contact you by any means (i.e., telephone, email, text, etc.) between the hours of 8:00 a.m. and 9:00 p.m.
- Send letters demanding payment
- Call your spouse and other family members to request information about how to get into contact with you
- Try to get you to make payments on debts after the statute of limitations (deadline) expires for collection of the debt
- File a lawsuit to collect the debt
What Debt Collectors Can’t Do
- Threaten you, use profane or obscene language, or repeatedly call you to harass you
- Lie to you or pretend to be an attorney for from a government agency
- Tell you that you will be arrested if you don’t pay a debt
- Claim they have taken legal action when they have not
- Cannot continue to call you or contact you if you have told them in writing by certified mail to stop contacting you
- Talk to other people about the details of your debts
- Garnish your wages without a court order, unless it is a student loan, IRS debt, or other debts owed to the government
What Has to be Paid First?
Prioritize what you need to pay. Your basic needs come first. You need to ensure that your family has a home, food, clothing, and utilities. You also need to ensure your family has transportation. Creating a household budget allows you to determine how much money you can afford to pay each month toward debts.
Ascend has tools to help you create a household budget and determine your monthly disposable income. Contact us to learn more about this free service.
What Do I Owe?
You need to know what you owe before deciding the best way to get out of debt. Common debts turned over to debt collectors include, but are not limited to:
- Medical bills
- Credit card debts
- Student loans
- Personal loans
- Payday loans
- Mortgage deficiencies after a foreclosure
- Car loan deficiencies after a repossession
Make a list of all debts you owe, including the amount, type of debt, and creditor’s name. In addition, make a note of the debt collector’s name and contact information if the account is in collections.
Debt collectors often lie to individuals about what they owe, even though the law says they cannot lie about debts. You need to know the balance of each account so that you do not overpay a debt.
Options for Getting Out of Debt
We understand that you want to pay your debts. However, life events often cause financial hardships that snowball into a mountain of debt. But, if you have debts you cannot pay, there is hope. Ascend helps you explore numerous ways to eliminate debt so you can get the fresh start you need.
Payment Plan with Debt Collectors
You can negotiate a payment plan with a debt collector. However, they can refuse a payment plan or demand larger payments. Here are a few things to keep in mind when negotiating with debt collectors:
- Never agree to automatic drafts. The debt collector may take larger payments from your bank account and take payments even when you do not have funds in the account, causing expensive overdraft fees.
- Do not agree to automatic payroll drafts or use personal checks to make debt collection payments. Instead, use a prepaid debit card that is not traceable to any bank account. You can also send payments by money order.
- Do not send any money to the debt collector until they provide a payment plan agreement in writing, including the total amount owed, the amount of each payment, and the payment frequency. Keep detailed records of each payment, so you know the balance remaining on the account.
Debt collectors may file a debt collection lawsuit at any time, even if you are making your scheduled payments. Payment plans with debt collectors can be frustrating. You must keep detailed records of each payment and a running balance of the debt. Debt collectors try to get as much money from you as possible, including charging interest and fees they may not be allowed to collect.
Debt Payoff Planning
If you have several debts you cannot pay, debt payoff planning may be the best option to get out of debt. But, first, you need to know how much money you can afford to pay toward debts each month. Ascend’s Savvy debt payoff planner helps you prioritize your debts to pay debts and get out of debt quickly.
Debt Settlement vs. Debt Management Companies
There are pros and cons to both of these debt relief options.
Debt settlement involves paying off debts in a lump sum amount. The creditor agrees to a lower payoff for immediate payment. However, you must have substantial funds to negotiate lump sum payments. Home equity loans and lines of credit are generally not the best way to pay off debts because you put your assets at risk.
Debt management companies claim to help you pay off debt quickly by negotiating lower payments and lower interest rates with your creditors. Beware! These companies charge high fees for their services. Also, your creditors are not required to work with the company. Even if a creditor accepts payments through the debt management company, the creditor could take legal action at any time to collect the debt.
Filing Bankruptcy to Get Rid of Debts
A Chapter 7 or Chapter 13 bankruptcy case might be the best way to get rid of debts you cannot pay. Your creditors must obey bankruptcy laws when you file for bankruptcy relief. For example, creditors cannot contact you about debts after filing a bankruptcy petition. Additionally, creditors cannot take any action to collect a discharged debt.
Contact Ascend Today for More Information
At Ascend, we want to help you get out of debt. Most of our services are free of charge. It costs you nothing to talk to a member of our team. Contact us today to learn more about how we can help you resolve debt problems and get rid of debt collectors.