Dealing with Debt Collectors

Debt collectors are one of the most aggravating businesses out there, and the abuse that comes from out of control collectors only seems to be getting worse with every passing year. It is important to learn what a debt collector is actually capable of doing, and even more importantly, what you can do about debt collectors in order to deal with them.

Debt collectors who are working on the behalf of creditors cannot do much more than just demand payment from you. If the creditor has not taken collateral on a loan such as the client's house, their car or some other property, then the creditor can only legally do three possible things:

• They can stop doing business with the client or consumer.
• They can report the default to the credit bureaus.
• They can take the consumer to court and sue them, though this treat is not typically as serious as most consumers worry because most creditors do not actually follow through on their threats of lawsuits.

Dealing with Debt Collectors

Harassment by collection agencies is prohibited in many states as well as by federal law. Protections are usually afforded to you by the state laws. Consumers should also consider the following steps. Combining more than one may be even more effective.

1 - Try to head the harassment off before it begins by dealing with the problem before the debt is referred to a collection agency.

2 - Write a cease letter to the collector, depending on the laws in your state and federal laws as well, as this may get the collection agency to step back and stop harassing you.

3 - If a cease letter does not stop the collector from bothering you, consider having your lawyer contact the collector. A lawyer letter may be able to ward tem off, especially if they can raise legal claims for the collector having violated federal law in harassing you.

4 - Negotiate with the collector before the debt goes to a collection agency. Consumers should avoid offering too much in the deal, however.

5 - Raise complaints about errors in billing and other potential defenses. If there are mistakes in the collection letter, consumers can write to demand a correction. The consumer can dispute the debt in writing within thirty days, and should if there are errors in the records.

6 - Make a complaint to a government agency, as there are numerous that are responsible for enforcing the laws protecting consumers from debt collection abuse. Consider contacting the attorney general for your state or the FTC.

7 - File for bankruptcy. While this is not the ideal deal for everyone, in most cases when you file the initial papers for a bankruptcy, the automatic stay will be triggered which will stop all collection activity at least for a period of time.

8 - If the debt collector has committed illegal conduct, you can sue them. Federal and state laws exist to provide consumers with protections against harassment from debt collectors and you can take advantage of this by suing the debt collectors that break the rules and harass you.

If you need help dealing with debt collectors, or harrasment for creditors, you can request a consultation with a bankruptcy attorney to discuss what options are best for you.