It wasn’t that long ago that when my phone rang, I knew there was a 90% chance that it was a bill collector. At the time, I was disorganized, severely in debt, and afraid to answer the calls or open my mail. It was an absolute horrible feeling and it made me feel like a complete failure. On some occasions, I actually gave in to their ridiculous demands and spent every dime I had to pay them and then had to worry about how I was going to eat until payday. Bill collectors have a right to try to collect what’s owed, but I hate their methods with a passion.
Now don’t get me wrong, I’m not ever going to advocate for not paying what you owe. When you borrow money, you give your word that you’re going to pay it back. Everybody hates paying bill collectors, but remember that your integrity is worth something. Every time I pay a bill that was the result of a dumb decision I made, I just remind myself that I’m paying what Dave Ramsey calls “tuition to the school of life”. Or as he frequently refers to as “stupid tax”. We all pay it, but it’s up to us to learn from it.
To this day, I’ll still get some unorganized hack-job calling me, trying to collect on a debt I paid off 5 years ago. I don’t get angry. I usually have fun with them and use it as a reminder of where I was and how I never want to go back. Actually, getting one of these calls the other day is what prompted me to write this article.
Bill collectors don’t run your life, and they should never take priority in your budget. Actually, they’re pretty low on the food chain. You can’t completely ignore them, but you can take control of the situation.
Here are a few pieces of advice for dealing with bill collectors:
Keep Them Informed
Bill collectors are some pushy people. They will do everything they can to bully you into giving up every penny you have. Don’t go for this. Yes, you owe them money, but you are still in control of the situation. It’s important to speak to them at least once a week and just let them know what you’re doing. Even if your conversation consists of telling them that you don’t have any money to pay them yet, you need to have it. If you never answer those calls, they can actually take action to “locate” you, which includes calling relatives and even your employer. I’ve had this happen and it’s embarrassing. Now, once they have confirmed your phone number and address, they can no longer speak to other people, so it’s important to AT LEAST establish that.
I used to schedule a day each week to call them and just tell them what’s up. I know this can be very intimidating and most of us don’t want to do this. Just remember to control the conversation and keep it short and to the point. Don’t be scared of them.
Know the Laws and Your Rights
Bill collectors used to scare the crap out of me. I’ve been threatened with wage garnishment, asset repossession and even arrest. Once I did the research and understood the laws, I realized that 90% of what they were doing was not only B.S. but illegal. I started calling them out on their threats and it virtually stopped.
The “Fair Debt Collections Practices Act” sets reasonable limits on creditors. The Federal Trade Commission has a great page setup to inform you of your rights and explain how to take action if you feel your rights have been violated. Also take a look at your state Attorney General’s Office website, as each state often has their own set of laws that further restrict collectors.
Here’s a link to the FTC page: http://www.consumer.ftc.gov/articles/0149-debt-collection
Get Everything in Writing
DO NOT pay collectors a dime without documentation actually proving that you owe the debt. Debt collectors are required to provide this at your request. It can be sent by e-mail or regular mail. Also, never pay a dime without a written agreement, especially when settling for a reduced amount. Trust me on this, I’ve been burned before. The last thing you want is to have them come back after you for the entire amount later, because they will. You need to have documentation proving that they agreed to the amount that you are paying. If they refuse to provide it, then don’t pay them. It’s the equivalent of making a large purchase from someone who refuses to provide you with a receipt.
NEVER Give Them Access to Your Bank Account
I made this mistake and wound up with a negative balance of over $600 one time. They had my debit card info and decided to run it on payday in increments of $200 until it stopped working. When I confronted them about it, they made up a B.S. story about how I consented to it. It was a bad situation, because I did owe them the money and I didn’t fully understand my rights. I went through the process to dispute the charges and it took me months to get my money back….which I ultimately had to pay them to settle the debt. I also had a debt collector leak my personal information and had my checking account cleaned out by someone who contacted me claiming to be a federal agent. Talk about a freaking nightmare!
There’s 2 ways I will pay collectors: By check or pre-paid debit. That’s it. I personally prefer to send either cashier’s checks / money orders or use the bill-pay feature on my checking account. This way I’m not giving them my account number. The pre-paid debit card method works well, too. I guess I just liked doing the check method because they hate it and it gave me some form of happiness knowing that I was inconveniencing them.
Don’t Allow them to Stress You Out
Debt can be stressful, but collectors don’t have to be. As a paramedic, I have become pretty good at controlling conversations and getting exactly what I need out of someone without having to talk back and forth for hours. By applying the same principles to bill collectors, I was able to keep my interactions with them to an absolute minimum.
I’m not sure that I would call this good advice, but I used to have a little fun with them. When I was in the mood for it, I would do things like answer the phone and act really stupid so that they had to explain everything to me like I was 4 years old. I would also act hard of hearing and see how many times I could get them repeat themselves. My personal best was answering the phone with the ambulance siren in the background. I told them that I was a paramedic and that I was doing CPR on the person that owns the cell phone. I then demanded that I needed them to tell me how they know the owner of the phone and to provide me with any emergency contact info and medical history. Of course, I’m NOT advocating that you do this…..but I thought it was pretty funny at the time. It was probably illegal, but that’s besides the point..
In all seriousness, don’t let debt collectors control your life. Take control of the situation. Never allow them to take food off your table. Only pay what you have budgeted and never allow them have access to your bank accounts. If you stick to your plan to payoff debt, this will pass before you know it.