How to Settle With A Debt Collector

When life is tough, sometimes you may not be able to pay your bills on time and that can send your accounts into collections. That can cause a lot of stress especially when collection agencies are hounding you day and night. But the situation doesn't need to be hopeless.

Dealing with debt collection agencies can be very frustrating especially when the debt collection effort becomes harassing, annoying, threatening and verbally abusive.

You have rights that credit card companies, banks and attorneys have to abide by. Knowing your rights can work to your advantage and assist you in rectifying your debt commitments. Credit card companies, collection agencies and banks must adhere to the Fair Debt Collection Practices Act (FDCPA) and any other law that apply to the practice of collecting debt.

Because of the Fair Debt Collection Practices Act, anyone who is the subject of debt collection has the basic right to verbally request that the debt collector not make contact by phone or not to contact the debtor's place of employment. The debtor can insist that any and all communication be by mail only. The FDCPA also requires that collection agencies refrain from contacting a debtor's friends and relatives to either attempt to embarrass the debtor or obtain additional information.

It is important to know that a debtor has the right insist upon privacy and that the debt collector must follow rules. If the debt collector does not follow the rules or the laws, the debtor has the right to complain and/or sue the debt collector.

Instructions

1

First, demand that the debt collector cease and desist from calling you, your employers, your family members and your friends for any reason unless you specifically set up terms in which the collector can do so. Legitimate debt collectors will adhere to the Fair Debt Collection Practices Act (FDCPA) and any other law that apply to the practice of collecting debt and will honor your verbal and written request to refrain from making telephone contact with you. It is important to note that you must make that request upon them and keep documentation of your request. Intentional harassment from a debt collection agency could expose them to law suits from the debtor.

2

Demand in writing to see any documents surrounding the debt in question. Carefully review each document for accuracy and to determine whether or not the debt in question is indeed yours.

3

Firmly dispute any inaccuracies and make sure that the debt in question is being properly purported in all ways. If the debt is not yours, dispute the debt with the collection agency and provide them with written details as to why. If the debt is not yours and the collection agency persist do not settle under any condition then inform them that you are prepared to defend yourself in court. Going to court is an expensive proposition for the debt collection agency and depending on the amount owed it may be a waste of time and money for that course of action. So dig in and do not waiver to unreasonable request if you do not owe the money.

4

Keep careful notes of any conversation that you have with any representative of the collection agency. It is likely that over the course of time that you will speak with several different agents and each may provide information that is different from your understanding from the last.

5

When you have determined that the debt in question is yours and that you want to settle, do not under any circumstances accept the full dollar figure that the collection agency demands. In most circumstances the debt collection agency has acquired your debt for pennies on the dollar and are in a position to make a profit from receiving money from you. Negotiate a reduced dollar figure. You may be able to negotiate 50% or more off of the original debt owed. 50% is a lot but again in most instances, the debt collection agency will still stand to profit and will be eager to seek a resolution that works for you and allows for profit on their end.

6

When you have negotiated a settlement, depending on your financial situation you may be either to elect to pay the negotiated balance in a one time payment or over the course of many months. Either way, make sure to obtain documentation that indicates that the original debt is paid and that you no longer owe anything for it.

7

Make sure that your credit report is correctly updated. Unfortunately, when debt is reported to credit agencies as debt that has gone into collections, that mark will remain on a credit report for seven years. In almost all instances, the very most you can do is to make sure that the mark is changed to "paid". The fact that an account went into collections in the first place will still be reflected on the credit report. But having it show up as paid will make a small difference to your credit score and may play a positive role in future credit endeavors.