Fight Debt Now
If you’re being dogged by debt collectors there are a few things you should know in order to protect yourself. You should prepare for whatever the eventual outcome may be. I’ve noticed that many of the people advertising their support of debtors are in reality agents of the debt collectors. They give you just the sort of advice you’d expect from that crowd. Some of the other advice or input you’ll get will lack depth of experience or a real-world basis. I am unapologetically on the side of people struggling to make ends meet who are being harassed by the debt collectors. At this site you can expect plain talk from a guy who lives in the real world.
We’ll start with a brief discussion of why you may be in the situation you’re in and what you should do to reverse that for the long-run. Then I’ll give you a series of tips on some of the laws regarding debt collection. You need to know who the debt collectors are and what they want. And how you should be speaking to them.
In the law they say that one always negotiates “in the shadow of the law,” meaning that you need to know your legal rights and act accordingly. Even if you keep an eye on your legal rights you don’t necessarily have to end up in court. In fact, the better you plan, the less likely you are to end up in court. The world would be a better place if fewer people spent so much time in court.
Some of the people you trust the most tell you to do the dumbest things. Remember how George Bush and other political leaders gave speeches telling people that their “patriotic duty was to shop” after 9-11?! And now we have Obama and his crowd telling everybody we should “spend our way out of the recession.” That's just going to make you poor. We’ve been encouraged by almost everybody to spend, spend, spend.
It’s crazy, and it’s going to keep you in the poor house. It’s time to find and enjoy some of the simple pleasures in life again. If you want to avoid phone calls from debt collectors over the long run, you’re going to have to look all the people trying to sell you useless stuff you can’t afford in the eye. Tell them to take a hike. Sometimes this may mean making difficult choices, but most of the time it’s really just going to mean remembering what you really want-- even when all the bozos are telling you to buy more, more, more.
Right now there’s a “situation.” You’re being called by debt collectors. Who are those guys? What do they want? And what should you do?
For present purposes, by “debt collector” I really mean “bill collector.” It’s somebody who is calling you because you owe their company money (or they think you do). The people initially calling you have very little authority to reduce the amount you owe, but they’re usually able to make a deal that will stretch out the payments for a long time. I suppose I should suggest that, if the bill is legitimate and you have the resources to enter an arrangement and keep it--and this is really important because people's decisions are often guided by wishful thinking rather than practical reality--this is probably the single best way to solve the problem and get the debt collectors out of your hair.
It makes sense to extract from the bill collectors a return promise not to hurt your credit rating. The company that originally lent you the money can delete any negative information they’ve given the credit reporting agencies and restore your credit rating if they want to at any time. Since you’re going to give them the money and save them the trouble and cost of pursuing you, they should do this. Make them. You may need to call up the chain of command to accomplish this, but there’s somebody at every company, no matter what the size of the company, that can do this for you. Get the agreement in writing before handing over cash or telling the company where you bank.
Most of the people who became my clients when I was practicing law simply could not afford to pay all their bills. If that’s you, you can take the bull by the horns by calling up the owner of the business (if it’s a small business) and talking to a manager or the owner. Remember that these guys want to make a profit, and pursuing you for money you’ll never be able to pay really won’t be in their best interests. Small business owners will often see the light. Work with them.
If matters have progressed beyond the bill collectors down to the debt collectors, there’s a different picture. A “debt collector” is a person or company whose primary job is to collect debts. Not sell groceries or clothes or gizmos. Collect debts. These are businesses that may have purchased (or been “assigned”) the debt from somebody else, or they may simply be contracting for the company that originally lent you the money. In this case the person calling you will probably not have any authority to do anything for you. If you have money and want to get the original creditor to work with you, the debt collector is simply an obstacle for you. You’re going to need to force the original company to talk to you.
If you don’t have money, the debt collector is there to bug you into paying them. To put it very simply, the purpose of the person calling you is to cause you to sacrifice yourself or other people and pay as much on the debt as they can goad you into paying. They know they’re taking food out of your mouth or resources from your children. They know they’re probably taking money out of the pockets of other businesses. They know that the way to get you to do this is to create such an annoyance, embarrassment or burden on you that you will act in a way that may well be foolish and harmful for you.
That’s the bottom line.
I’m not saying the individual actually calling you will mean to hurt you. That person may be pleasant or abusive as they believe will get the job done or maybe according to their mood. Generally the caller is trained to spend a lot of time on the phone with you, listening, talking or yelling, because this increases the burden of the debt on you and rubs your face in it.
They know that the more their bill is in your face the more likely you are to pay them and not someone else. It follows that if you can’t pay them, you should minimize your time on the phone with them. I have not observed that spending time on the phone with low-level debt collectors delays a decision to sue you. Or has any effect on the decision whether or not to sue you at all.
But… whatever the statute of limitations (time limit) for suing you may be in your state, it generally will begin after the last payment you have made. So any payment you make will likely extend the amount of time they, or another company, have to sue you. This increases the cost to you, gives them more time to harass you and prolongs the inevetible. I generally didn't advise my clients to do that.
You can probably find out the statute of limitations for your debts by googling “statute of limitations,” your state, and your type of bill (credit card, department store revolving credit account, etc.) If your last payment is close to that statute of limitations you might be giving the debt a new lease on life by making another payment of any amount, however small. Remember also that there’s a time limit on how long people can trash your credit report, and this too dates from that last payment.
You see why I say the debt collectors are often simply trying to get you to act in a way that hurts you. Perhaps even more than you realize.
Take a look back at the FDCPA and the things that are considered "unfair." Look specially at the ways debt collectors are entitled to locate you or information about you. Make sure they follow the law. If they don't, make sure you keep records that will allow you to prove what they've done wrong. Remember to be tough and to protect your rights.
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