Don't fall prey to aggressive debt collection tactics

Debt collectors must follow rules set by law

The Credit Guy columnist Todd Ossenfort
Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly "The Credit Guy" column, answering reader questions about credit counseling and debt issues.

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Question for the expert

Dear Credit Guy,
I have a credit card debt that has gone to the first stages of collection. I recently talked with the collector about my debt and was offered a settlement of half the balance. I was told that it could be paid in one lump sum or in three payments of about $1,300 each.

I told him that I would love to take that settlement, but I do not have the money to do that and asked for some time to try to come up with it. Of course, I was told that this was a 24-hour deal. He tried to tell me I didn't have any other options other than paying the full balance in 12 months at over $600 a month! Again, I let him know that I didn't have that kind of money being out of work for the past six months and just starting a new job.

Anything I tried to come up with that would be something I could afford and not put me out of my apartment he said no to and would not give me any decisionmaking time. It all had to be right now and his way or nothing! Now he is harassing me with phone calls where he won't listen to anything I have to say.  He is unwilling to make any deal with me that I am comfortable with. I want to pay this debt, but it has to be on easier terms. Can you help? -- Robert

Answer for the expert

Dear Robert,
Congratulations on knowing what you can afford to pay on your debt and sticking to your guns while communicating with the collector. It sounds as if this is your first experience with collectors, and you do not have the experience with unpaid debt that the collector does. The collector does this for a living and has scripts on what to say to consumers in debt to get them to pay what they owe. You did very well by not caving in and agreeing to something that you know you cannot afford.

You state that you know this is your debt and that you would like to pay what you owe. You have several choices in how to move forward with the collector. First, if the collector will not listen to you and you feel you are being harassed, stop answering the phone. Instead, send a written offer to pay what you can afford each month to the collector along with the payment to show your offer is serious. Send the correspondence certified mail with a return receipt request. You can then wait to see if you receive anything from the collector in writing regarding your offer. If the collector suggests a larger monthly payment, once again, stick to only the amount you can afford. The danger here is the collector could decide to sue you in court, file a judgment (if the collector wins in court) and garnish your wages if a payment plan is not reached.

Second, you could consider hiring an attorney with experience in handling consumer debt issues. Once you hire an attorney, the Fair Debt Collection Practices Act stipulates that you can demand that all communication concerning the debt go through your attorney. You will spend a little more satisfying your debt, but you will have an advocate on your side to assure you receive a fair and affordable debt repayment agreement. 

Lastly, you might consider contacting a nonprofit credit counseling agency (accredited with either the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies) to assist you in negotiating with the collector. After reviewing your financial situation with a certified counselor, you can decide if repaying the debt through a debt management plan (DMP) would make sense for you. The cost would most likely be less than hiring an attorney, but you would have a small monthly fee ($50 or less, based on state laws) for repaying the debt with a DMP.

However you decide to move forward, continue to insist that you will only pay what you can afford monthly.

Take care of your credit!

See related: How wage garnishment works -- and how to avoid it, Take these steps to avoid wage garnishment, Know your rights: Fair Debt Collection Practices Act, 11 tips for dealing with debt collection, collectors, Debt collection sample letters

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Updated: 01-23-2018