When you started college or opened your first credit card or had to have your appendix removed, you probably did not think it would cause massive problems for you down the line. You did not count on owing debt over the long term. Now, your situation changed, and that bill still sits there waiting for you to pay it.

You probably want to find a way to deal with the bills. No person typically plans to welch on their bills. Most people open a credit card and make payments regularly. Something happens like losing their job, and they fall behind. It happens.

How to Deal With Debt Collectors?

What also happens is that the credit card company or the bank or the hospital hires a debt collector after their internal staff becomes exhausted trying to recoup the money owed.

You do not need those debt collectors harassing you. In fact, if they have become harassing, they are breaking the law. The US government set specific laws governing how credit card companies, banks, and other debtors, the debt collectors they hire, can contact individuals. The law also limits the methods they can use and what they can say or do. It provides each individual the right to tell the companies to cease all methods of contact and once they say that the company may not legally contact them again. The debtor or debt collector cannot legally hire someone else to do it either once the debtee has stated that they refuse contact. More on all of this later.

So, how do you learn how to deal with debt collectors when you can't pay?

Start by reading this article.

The Obvious Answer

It takes three months of you not paying anything on a bill for it to move into collections. This makes the obvious answer that you do not allow your bills to get that behind.

Behaving in a proactive manner also helps you look good to the creditor. They know that you stay on top of your finances. You respect your debt.

Okay, but what if you already owe?

Handling Debt and Debt Collectors

Let’s get the other obvious out of the way.

When you get a new phone number, it was someone else’s old phone number. You may find yourself receiving spam calls, sales calls, and debtor calls for the person who once had that number. Legally, all you have to do is tell the debt collector that they are calling the person’s old number and your name. Let them know it is now your number and that should solve the problem.

They have no legal right to phone you about a stranger’s debt. Even if you were the family of a person who owes a debt, they only get one phone call to the family member. Once they speak to the person once to try to locate the other person, they have no further right to contact that person.

If this happens, and you tell the debt collector nicely your name and that this is your new number, but they phone you again, you should report them to the Federal Trade Commission (FTC). They are breaking federal law so long as you are telling the truth.

Also, avoid getting upset at the person for whom they ask. First, you do not know the whole situation. Second, most debt collectors making calls to old numbers are unscrupulous folks that the FTC is trying to close down. They harass people about zombie debts.

“They’re coming to get you, Barbara.”

No, zombie debt is not an homage to “Night of the Living Dead.” Zombie debt occurs when you settle a debt for a reduced amount and after the statute of limitations has passed, a debt collector attempts to re-collect the debt that the person already settled and paid. The zombie part of the name comes from the fact that it was a “dead” debt, a paid-off one.

The other category of these callers falls into scammers. They phone using robo-dialers claiming that the person at the number owes student loan debt or a car loan. They offer to help you avoid defaulting or to settle the debt for a lesser amount.

You KNOW it is a scam when any entity offers to reduce the amount of a student loan. They never do that. You can have a student loan debt forgiven. You can earn a reward that you put toward paying off a student loan, typically through service via AmeriCorps, VISTA, or Teach for America. The US government does not negotiate for a percentage of debt though.

So, before you start thinking poorly of a person, as my dad would have said, realize that they probably had the cell phone number long enough to pick up some unscrupulous spam just like people did with landline phones years ago.

Register the number of your cell phone with the Do Not Call List online. This requires you to provide your name, address, and telephone number, and registration on it means that telemarketers cannot legally contact you at that number.

So, if you got a new cell number, you could register it at the DNC website and apprise the debt collectors of this when they call. This helps you get rid of them because they have access to this list. They can check it and see that, indeed, that number now belongs to you and not the person they wanted to reach with their spam.

Hangs Head. The Debts Are Mine Though

Okay. There’s help for that, too. You have debt management solutions available to you. Let me grab a cup of espresso. You can do the same. We'll meet back here in five minutes.

Okay, back to proactive financial management.

First, the US government protects you from debt collectors harassing you. The prevailing law in this area, The Fair Debt Collection Practices Act, limits how and when they can contact you. It also limits what they can say and how they can say it.

They cannot:

• Berate you. Curse you. Yell at you. Threaten you.

• Lie to you. Mislead you. Falsify information.

• Contact you in any manner you stipulate that they cannot. If you say, "I really cannot talk to you on the phone, but here is my email address. I would happily email with you about this matter," then they have to do that. Legally.

• Contact you at a time they know is inconvenient, such as your work hours. If you tell them you can’t talk during specific hours, they must adhere to that.

• The law assumes convenient times fall between 8 am to 8 pm in the debtee’s time zone, but the debtee can tell them that those aren’t convenient, and they must use a convenient time to the debtee. (If the individual works from home or in an office from 8 am to 6 pm, they obviously would not want constant interruptions about their invoices.)

• Call you directly once you let them know you retained the services of an attorney, and you provided that attorney’s name and number.

• Call you at work if you tell them that your employer does not allow personal calls at work.

• Call your family, friends, neighbors, random strangers, etc., or contact them in any other way. Your debt is a private matter protected by federal law. They may speak to you directly about it or your attorney if you hire one. That is all. That is it. Smack them upside the head with an FTC violation if they dare do otherwise.

1. This means that you can tell them your email address and offer to conduct all correspondence via email. You can tell them that no other form of contact currently existing or created in the future is acceptable except email.

2. You can also tell them that no form of contact is acceptable or allowed. If you want to do the latter, you need to also mail them a certified letter that results in you getting a receipt of delivery when it reaches them.

The simplest thing to do is to limit them to email which puts everything in writing and makes it so much easier on you when you go to court as you will probably need to if they continue to harass you.

Paying Off the Debts

Now that the phone stopped ringing and you have achieved peace and quiet, let’s get down to business on how to get those debts caught up. You have four higher priorities than any credit card debt or hospital bill. You must first pay for:

1. Shelter,

2. Food,

3. Utilities,

4. Transportation.

Logically, you need a safe, enclosed place to sleep. You also have to eat to live. The place you sleep in needs lights and heat and cooling. You also need a method of getting to and from work.

Once you pay for those four things, you can put the remainder towards your bills, and you should. Back to paying just $5 a month lets the creditor see that you want to pay them. Sometimes that really is everything. When you show them that you want to pay your bills, they will help you do it by creating a payment plan.

Getting Started Getting It All Together

You can learn how to deal with debt collectors when you can't pay, and you can learn how to reduce your bills while increasing your income, so you can pay them.

Start by signing up for a Member Key with Goalry. That gets you access to all the member sites, so you can learn how to budget at Budgetry and build wealth at Wealthry and do your taxes at Taxry plus much more.

Forget pie in the sky overnight fixes. You can find a better way though, so you stop drowning in debt. You can easily increase your income while you pay your bills. Let us help.