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Tips and Tools To Deal With Creditors and Collectors

We’ve all been there…not having enough money to pay all our bills, and creditors and collectors are calling demanding payment! When a loss of income, an emergency, or some other personal situation causes you to miss payments, use these free creditor letters, tools, techniques, and tips to protect yourself when creditors call.D iscussing your accounts with your creditors is often a necessary evil, but there are guidelines for contacting creditors, including when should you contact your creditors. A phone script is especially good at helping you remain in control of your emotions while negotiating a temporary payment plan with your creditors.

Tips For Dealing With Creditors

When you experience a loss of income and cannot meet your monthly payments you need to know your rights so you can stop collection harassment. There are many federal and state laws that offer protection from creditors and collectors who use unfair, unethical and even illegal tactics collection tactics.

Guidelines for contacting creditors

When should you contact your creditors?

Your creditors want to hear from you before you become delinquent on your bills. Creditors are more willing to work with you if they know your situation ahead of time. If your bills are already late, and you are still asking yourself when you should contact your creditors, it may be too late and they may have already turned your account over to collections. There may be advantages to contacting your creditors early in the delinquency process. Early intervention may get your creditor to:

  • Eliminate late charges on your account
  • Not report your delinquency to credit reporting agencies.
  • Permit you to make interest-only payments for awhile
  • Prevent your utilities from being cut off.
  • Not turn your account over to a collection agency
  • Defer payments to the end of your contract.

Before contacting your creditors, know what you can and cannot afford to do. Try to figure out a solution that you can live with and will make them happy prior to calling. Only promise to pay what you can afford by asking yourself these questions:

  • How much take home income can I count on?
  • What are my current fixed payments? (mortgage, rent, auto loans, etc.).
  • What are my current flexible expenses? (food, clothing, fun, etc.).
  • Will I have additional income in the future?

Sample Debt Collection Response Letters and Stop Collection Calls Scripts

Prior to contacting your creditors by phone it may be helpful to first write down what you intend to say. This can help defuse the emotion, and make it easier to talk with them. Be honest and courteous, and never promise one creditor money that you already agreed to pay another. Also, keep a copy of your payment plan by the phone will help keep you strong when creditors unexpectedly call. Our sample debt collection response letters and stop collection calls scripts, including this free sample creditor phone script, may help as well.

Take good notes when you call, of including the name of the people you speak with, the date and time you talked with them, and what you discussed. This free sample creditor phone log may help you track your conversations. And always follow up all phone calls with a letter, keeping a copy for yourself. A follow-up letter helps confirm and clarify what was agreed upon, shows you really want to resolve the problem, and gives you and your creditors a record of what was said. You can use this free sample creditor confirmation letter if you make a satisfaction arrangement.

If you believe you are a victim of unfair or illegal debt collection tactics, need help settling your debts, or have fallen behind on your bills and just need any help you can get, don’t panic—you may have several good options available to you. Your success starts by assessing your current situation and finding a trusted Debt Help Lawyer that is licensed in your state. Click here for more information and for a FREE debt help analysis.

Guidelines for Contacting Creditors

Creditors want to hear from you before you your bills are late and are more willing to work with you if they know your situation. Guidelines for contacting creditors.

Phone Script for Calling Creditors

If you’re nervous about calling creditors to ask for reduced or delayed payments then use this script to control emotions so you can negotiate better!

Phone Log – For recording calls to creditors

Keeping accurate records of calls can protect you down the road. Use this free sample phone log to keep accurate records of all calls to creditors.

Credit Practices Co-signer Law

Learn how this federal law prohibits certain co-signer credit contracts and how you must be warned about liability if the other person fails to pay.

Letter to Confirm Payment Agreements

After negotiating lower interest and payment agreements with your creditors, use this free sample letter to confirm the payment arrangement!

Letter to Dispute Credit Card Bill

Need to dispute an item on your credit card bill? Use this free sample letter to dispute items in accordance with the Fair Credit Billing Act.

Credit Warning Signs!

If you recognize any of these danger signs, then you’re already in serious financial trouble and need help – nonprofit debt and credit counseling is available!

About Credit and Debit Cards

Learn about the hidden fees and charges in unsecured credit cards and why credit card insurance is useless!

Tips for Stopping Debt Collectors

All information, advice, tips and letters are based on the assumption that you have run into unexpected financial problems and now you need help dealing with collectors who do not listen when you say the debt is not yours, the debt is invalid or you no longer have the means to pay the debt. Stopping debt collections may require the help of the FDCPA, your most powerful weapon against unfair and illegal collection practices. Bill collectors, as defined by the FDCPA, must follow the rules when contacting you and when you contact them. Below are three of those rules:

  1. What type of notification letters are legal?
  2. How to take action – sample letters
  3. What if they continue to call?

It’s possible to stop bill collection efforts using your State’s Statute of Limitations (SoL) for enforcing debts!

Most debts expire! That’s right, almost all debts eventually expire. Put another way, the legal time limit for enforcing the collection of a debt can expire. It’s called the Statute of Limitations and every state has its own SoL rules. Most unsecured debts expire 4 – 6 six years after going into default. Some debts such as federal student loans and federal and state taxes never expire. Judgments may have a statue of limitations as long as 20 years and, in some states overdue child support never expires!

If you’ve been contacted about an old debt, AND you’re sure it’s yours, then you need to decide whether to pay the debt or not. Although there are many moral, personal and legal issues to consider before making a decision; one thing you should always verify is whether or not the statutes of limitations for enforcing the debt has expired. Doing so allows you to make an informed decision.

Three important FDCPA Rules

1. What type of notification letters are legal?

All collection agents and certain attorneys must comply with section 12 of the Fair Debt Collection Practices Act (FDCPA) which clearly regulates the type of letters and the language that collection agents can use. Section 807 explains what collectors can and cannot do and provides sixteen specific examples of false or misleading tactics. Bill collectors face fines up to $1,000 per violation and, if you or your reputation are damaged, the FDCPA allows for punitive damages as well.

If you’ve received a deceptive collection letter and want to pursue legal action, you’ll need an attorney. Click here to locate a FREE* Fair Debt Lawyer.

2. How to take action!

The FDCPA requires bill collectors to make sure they have the right person and that they are collecting the legal amount of money. Collectors have the right to try and locate debtors and this sometimes results in calls to the wrong person because of inaccurate information and record-keeping. Although contacting the wrong person is not a violation of the FDCPA, continuing to call that same person after being informed they have the wrong person is a serious violation. Just as serious is calling and using harassing and abusive tactics especially when the debtor disputes the debt.

When you believe debts are invalid or they are not your debts use these links to view free sample letters that you can use to write your own dispute letter to stop unethical and illegal bill collection harassment.

Dispute Letter – Initial

Dispute Letter – Follow-up

Mailing and Record Keeping Instructions

NOTE: Follow the mailing instructions closely as accurate records are key to proving your case!

3. What if they continue to call?

The FDCPA requires collectors, upon receipt of your written dispute, to stop all collection efforts and to cease all contact with you until they comply with section 809 – validation of debts.

Although bill collectors who continue to demand payment without validating the debt can be sued for violating the FDCPA you must keep in mind that until they receive your written dispute, they can continue their collection activities and if you fail to respond within the 30 day limitation period, they can ignore your dispute altogether.

In order to prove debt collectors have violated the FDCPA, you’ll need accurate records. Therefore, keep all written correspondence including envelopes and mail receipts. Record all phone calls BUT TELL the caller you are taping the call. With proof in hand, contact your state attorney general and file a formal complaint.

The FDCPA also requires collectors, upon receipt of your written stop calling letter, to cease all contact with you except for specific types of contact. Any contact after receiving your stop calling letter CANNOT include a “demand for payment”.

IMPORTANT: Bill collectors are usually able to validate debts fairly quickly on delinquent accounts less than a few years old. However, as the debt ages it becomes harder to validate because the original creditor may have deleted some accounts or the records have been lost or misplaced due to the business being sold or it went out of business. Another reason is debts are sold on the junk debt circuit so many times, the original creditor information may have been lost along the way.

When collectors cannot validate a debt, they often sell the debt to another junk debt buyer. Because the FDCPA does not require collectors to tell you when they sell your account and the law prohibits collectors from sharing your information with other collectors, you can expect to be contacted by a different collection agency! When this happens, expect to dispute the debt all over again.

Remember “knowledge is power”
Learn as much as you can about the FDCPA and your rights so you are better prepared to deal with collection situations as they come up. Some bill collectors can be particularly nasty, underhanded, and persistent but don’t be intimidated! Protect yourself by learning your rights and by report violations to your state attorney general!

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