Debt – Collections- 5 Steps To Handle Aggressive Creditors And Get Out of Debt Collections

Chances are if you have fallen behind on one or more bills, debt collectors have already started calling you. 

The father you fall behind the more relentless they can get in their tactics.  To say this is stressful is an understatement.  But if you react out of desperation without a calm plan to approach the problem, you can potentially make the situation 10 times worse. 

For that reason alone, here is 5 steps to handle aggressive creditors and learn how to get out of debt collections.

1. Avoid Panic Or Make Stress-Based Decisions Out Of Fear

The first measure of order is to avoid panic or make stress-based decisions out of fear.  Too many times people make payment arrangements they can’t possibly afford just to get the debt collector off the phone. 

Because debt collectors are incentivized by how much or collecting any money in general, they will make threats.  The threats on how they can collect the money can seem terrifying frightening you into desperate measures.

Now by me mentioning the words “seem frightening” provide you a false sense of security that the threats are idle.  It is certainly true, if you don’t pay debt that you truly owe, the creditor can and will sue you as well as place a judgment against you. 

By doing this it will allow them the legal option to garnish your wages or freeze your bank account.

However, this should not stop you from acting calmly and rationally. You should definitely not agree immediately to payment arrangements that puts you in dire straits financially.

At the same token you should not ignore the issue.  You do have rights, but the actions you can take to defend against the aggressive collections have limited time frames.  If you hide from the debt because you are too stressed to face it this will definitely make your situation worse.

2. Become Educated On Your Rights As A Debtor.

It is important for you to know  that there is a number of debt collection laws that exist to protect you.  For instance here is 2 that immediately comes to mind:

• The Federal Trade Commission prohibits and limits where and how they can contact you.  By becoming familiar and understanding your rights under the Fair Debt Protection Act it provides you the tools to handle collections processes in more proactive ways.

• The Fair Debt Protection Act also lets you know when a debt collector is violating laws. If they are in violation, This provides you ammunition to report them to the Consumer Financial Protection Bureau.

3.  Gather As Much Information You Can About The Debt

          When a collector calls harassing you about a debt just don’t take their word for it.  Take a few minutes to gather everything you know about the debt. 

Begin with first by asking yourself this question: Are you already aware of this debt and do you have any information about it in your own records?  

Follow up with the 2^nd move of figuring out is it a debt you never heard of, which could mean that it is not actually something you owe.

Finally, and most importantly check your government official credit report at annualcreditreport.com to see what information is reported about the debt.  

4. Request Written Proof Of The Debt

Let’s say the debt does show up on your credit report showing you its legitimacy.  Even if this is the case you should request that the collection agency validate the debt.  By validation I mean by law all creditors are required to provide a verification letter.

The letter should at minimum reflect four specific line items of information.

 They are:

1. The name of the original creditor.
2. The name of the collection agency.
3. The total amount owed.
4. Several legal statements about your rights as a debtor.

But this isn’t always enough information to set your mind at ease that you actually owe this amount or debt.

After receiving the verification letter, you can write a validation letter. You must send it within 30 days of receiving the original collection notice. If the collector receives a validation request, it must cease collection activity until it responds.

5)  Make Payment Arrangements To Pay Accurate Debt

This is the final step for a reason. Once you find out that the debts have been verified and legitimate the best way to get out of collections is to pay the balance. 

Now depending on the balance owed a full cash payment although ideal, may not be possible.  This has never been more apparent now living under the Covid 19 Virus and its economic impact.  So setting up a payment arrangement is your best option. 

Be sure you can keep a paper trail and have every agreement you work out  in some form of writing. 

Nothing is worse than taking all the painstaking trouble to start making payments only to have your efforts derailed by the collection agency selling your debt to another collection agency. 

Unfortunately this is not a rare occurrence as I have seen this happen numerous times in my years of experience as a credit counselor.

There you have it.  By following these 5 steps you will not only be able to handle aggressive creditors and get out of debt collections, but you will be able to move your credit report in a positive direction.