How to Stay in Control When Working with Creditors and Debt Collectors

( – If you’re like most consumers, you may rely on credit cards to make purchases — everything from groceries to an occasional meal out to the clothes you need to reflect your success.

Unfortunately, you may also eventually have a run in with a debt collector if you end up letting credit card expenses pile up unpaid, or if you have another type of bill they are calling about, such as a medical expense, auto loan, or payment plan.

If a creditor has contacted you, there are some critical pieces of information to keep in mind when dealing with them.

Ensure They’re Playing By the Rules

The first thing you should do if a creditor contacts you about an unpaid debt is to look at the terms and conditions of your original agreement. That could look like a credit card agreement or loan paperwork.

Make sure any charges you’ve been assessed are in accordance with the original agreement. While you might hear politicians talking about cracking down on banks and other creditors that assess exorbitant or false fees, it still happens, especially when the loans are short-term, high interest, or payday loans.

Always make sure you reference the terms of repayment if you have to negotiate a debt; if you do not have them, they must provide the terms to you. Don’t start repaying that debt until you get a repayment agreement in writing.

Do Not Tolerate Harassment and Bullying

Per the United States Fair Debt Collection Practices Act, debt collectors and creditors cannot engage in predatory behavior, like calling you late at night, calling you after you’ve asked them to stop, humiliating you in public, or threatening they’ll have you arrested. All of this is illegal, and it includes them posting or calling you out online.

Understand Your Debt’s Statute of Limitations

There’s a limit on the amount of time debt collectors have to pursue collection of your debt by filing a lawsuit. This is called a statute of limitations. The statute of limitations is variable depending upon your state’s laws, whether your state’s laws can apply to your credit agreement, and the type of debt you owe.

Most of the time, the statute of limitations falls within three to six years, depending on the type of debt and your state. The time period begins when you miss your first payment or from your last payment’s date. While debt collectors can still contact you after the statute of limitations has expired, but if they threaten to sue you after the statute of limitations is up, that’s a Fair Debt Collections Practices Act violation.

Debt Collection Scams and How to Spot Them

These stressful debt collection attempts, calls, and lawsuits can disrupt your life. However, scammers add one more layer to the annoyance of debt collection calls. There are several red flags that are surefire ways to indicate you’re dealing with a scammer. They are:

  • The debt collector pursues personal information, like your social security number or bank account.
  • They will not provide information about the original debt or creditor.
  • The collector pressures you to pay via a prepaid card or money transfer.
  • They threaten your friends or family or call your employer.
  • The debt collector says they’re a government official and/or tells you they will send you to jail.

If you’re in major financial trouble and have questions about if, when, and how to repay your debts, or if you aren’t sure whether you’re being scammed, you should seek the help of a financial professional or a lawyer. If you think you’re being scammed, you should file a complaint with the Consumer Financial Protection Bureau by calling 855-411-2372.

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