Dealing With Debt Collectors

viseYou are being squeezed between your current needs and the debts of the past.

Your creditor threatens to “send you to collections”.

The debt collector promises to call every 20 minutes until you pay.

The caller claims to be law enforcement with a warrant for your arrest for non-payment.

Welcome to the world of debt collectors.

Fundamental truths

Whether threatening or sympathetic, the debt collector has only his own interests at heart.

Many are willing to distort the truth and pretend to powers they don’t have to get you to pay.

They care not what doesn’t get paid so long as you pay them.

Resist, until you have taken care of your basic needs.

Don’t be intimidated into paying unsecured credit card debt before housing, transportation and taxes.

Powerless in the short run

When all is said and done, credit card collectors don’t have easily available ways to MAKE you pay.

They rely on shame, irritation or fear to GET you to pay voluntarily, because they can’t take money from you without your help.

Collectors rely on your ignorance about collection proceedings to create fear, shame, and insecurity.

Unsecured creditors can’t take money from your account or seize your assets without suing you first and getting a judgment. You have to get notice of such a suit and an opportunity to contest the charge.  That’s what “due process” means.

Creditors sometimes threaten to “send you to collections” as though it was a real place, full of horrors.

In reality, it just means they are handing the problem off to someone else, who has no more real power to take your assets than the speaker does. Don’t be stampeded.

Don’t be swayed from your plan to put first things first.

Knowledge is power

Know your rights about debt collection.

The Fair Debt Collection Practices Act gives you a right to tell collectors not to contact you.

Some states have similar laws. The California Rosenthal Act  applies to the creditor itself as well as any third party collector.

Be cautious about debt consolidation loans or services

Whole industries have sprung up to “help” the financially stressed recover. Some of their “help” you are better off without.

Avoid credit repair scams

Another group of scammers prey on the fixation of consumers with their credit reports.  They want you to pay them to “fix” your credit report.

The things that can be done legally to correct credit reports, you can do yourself; what they propose to do may well be illegal or ineffective.

Read more

Read the FTC’s tips on credit repair

Read Elizabeth Warren’s book All Your Worth.

What to do when you’ve been sued

Is bankruptcy right for you?

Image courtesy of tjunghaor

About the Author
Northern California bankruptcy lawyer Cathy is a 30+ year veteran of bankruptcy practice in the Silicon Valley. She is known for energetic representation of clients and her command of bankruptcy law.