Three Tips Dealing With Collection Agencies

When dealing with collection agencies there are important tips to keep in mind. It’s important to know if the debt is actually yours and know if it’s a first-party or third-party collection. With first-party collections, a collection agency is hired by the lender. In the case of third-party collections, a lender writes off your debt then sells it cheaply to a collection agency. The agency will collect the entire debt and pocket the profit.

Here are three tips to consider when dealing with collection agencies:

1. Collection agencies are not allowed to harass debtors in any way. Most states only allow three collection phone calls within a seven-day time frame. These calls must be made between 8 a.m. and 9 p.m., Monday through Saturday and 1 p.m. through 5 p.m. on Sundays: no holiday calls are permitted. Collectors may not call family, an employer, friends, or neighbors in order to obtain any information beyond basic contact information. Any call made beyond these limits is considered harassment and should be reported to the local District Attorney’s office.
2. Communicate with collection agencies in writing and require them to do the same, without any other form of contact. This automatically prohibits them from calling you and pertains to payment plans, debt reduction, or any special arrangements. This does not mean they are allowed to send you a bill every day. By communicating through writing, there is documentation if it’s necessary for you to report them for harassment; especially if they choose to be completely uncooperative and disrespectful. 
3. Check the date of the disputed debt because all states have their own statute of limitations. Collection agencies and lenders are not allowed to pursue legal action past this time limit. Be sure the debt is within the time limits because any payment amount will reactivate the statute of limitations.

These tips are useful when collection agencies insist on calling at all hours of the day or night or they refuse to work with you. Sometimes the amount of debt can be negotiated for reduction. Be sure to do this in writing if an agreement is reached and keep all payment receipts for documentation. Before admitting to a debt or making any payments, require the collection agency to provide proof that the debt is truly yours. Reputable collection agencies will work with debtors to form payment plans, possibly reduce debts, and have respect for those they are contacting. You can also demand that the collection agency refrain from contacting you, through writing or by phone.

By following these tips, you can successfully protect yourself and negotiate with creditors who are attempting to collect on a debt. Collections has become a tough business and more and more consumers are falling into traps dealing with them in a genuine attempt to resolve their debt issues.