Although every state has different laws and rights regarding Consumer Debt, Collection Agencies have very few rights when collecting yours. However, since debt collectors want to create a sense of urgency for you to pay your debts and pay them quickly, they will often make up lies in order to “scare you” into paying. Thanks to the FTC's Fair Debt Collection Practices Act designed to "eliminate abusive, deceptive and unfair collection practices,” collection agencies have fewer rights in their debt collection procedures. So, here are some of the truths behind the debt collectors' lies, and advice on how to bully them into taking what they can get.
LIE # 1: “We are going to take you to court and sue you for everything you own.”
THE TRUTH: A debt collector cannot take a consumer to court unless they are located in the same state you are. This is the rule for the majority of states, and you can find out your exact rights at your local District Attorney's office.
BE THE BULLY: When a debt collector threatens to sue you, don't be intimidated. They want you to pay them NOW, but you need to remember to do what's best for you. Whether or not they can take you to court, you want to be assured that they do have your debt by calling the original debt company first. If they do have your debt, ask the new debt collectors “How much will they settle for?” Don't offer an amount; let them throw out the numbers first. They will try to get you to make monthly payments for the full amount, but if you tell them you want to pay them off, they will give you a settlement amount as low as 30% of what you owe and you will be paid off forever within three to four months.
LIE # 2: “We will keep calling you until you pay off our debt.”
THE TRUTH: A Creditor CANNOT call you if you inform them that you only wished to be contacted by mail. Depending on the state, continued debt collection calls would give you a case against them IF you have made it clear you only wish to be contacted by mail. If you don't wish to speak with them regarding your account, simply send them a “Cease and Desist” letter thereby creating documented proof (handy evidence if you ever do sue them).
BE THE BULLY: When a debt collector calls, if you are not ready to negotiate with them, demand that they stop calling you and hang up. More often then not, they called from a computer that randomly telephones their clients. By hanging up, they will not be able to call you back to chew you out for your actions.
LIE # 3: “We will call your boss and get you fired if you do not pay off this debt immediately.” Or, “We will have your boss garnish your wages if you do not pay off the debt now.”
THE TRUTH: A Creditor cannot call your workplace and talk to your boss, and they cannot garnish your wages without a court order. Again, harassment gives you the right to sue them, especially if you get in trouble for their phone calls.
BE THE BULLY: They should not have your phone number, but if they get it and they call you at work, tell them to remove that phone number immediately and order them to only contact you by mail. Hang up on them whenever they call, and then let your boss what is going on. This way, your boss will know that you are not encouraging the collection agency's irritating actions.
LIE # 4: “We will repossess everything you own until you pay us off.”
THE TRUTH: Credit card debt is unsecured debt. This means that you have not guaranteed payment to them and they cannot try to repossess any of your possessions. However, homes and cars can be repossessed as these are secured loans and you did guarantee that you would pay the items off when you signed the paperwork. In the case of secured credit cards, you deposit money into a bank account equal to your credit line, and if you do not pay, they get to keep that money to pay off your debt. Other then that, the only time they can collect is if they have taken you to court and won…but that's a different matter.
BE THE BULLY: When debt collectors call you looking for payment, you can ask them not to contact you by phone. While home loan lenders and car lenders do need to have a phone number when you have an open account, you can direct them to your home instead of your cell phone. If and when they do call, tell them when you expect to have the money for the payment, and be firm that you will make the payment at a later date. They will try to wheedle the money out of you then, and only allow them to take a payment that you can afford. Remember, you have the power and repossession is a last resort for them.
LIE # 5: “We will ruin your credit forever.”
THE TRUTH: No one but you can ruin your credit “forever.” Even with identity theft, there are steps you can take to protect your good credit. Any negatives that a debt collector puts on your account is only there for approximately seven years from the date it was first reported. After seven years, it will drop off and your credit score will go up.
BE THE BULLY: Don't even deal with them. If they are telling you this, they are lying to you and they will continue to lie to you. Tell them to “put it in writing” and get off the phone with them as soon as possible.
LIE # 6: “We cannot send you a letter verifying this conversation.”
THE TRUTH: Every business has printers and faxes and emails these days. When a collector says they cannot send you a letter verifying whatever they are telling you, they are lying to you so that they can get their own way.
BE THE BULLY: Continue to insist on receiving a letter verifying your payment agreement, or whatever promises they are making you. If they tell you they cannot, tell them you will not pay them until you receive it. Insist that they at least email it to you (as email provides a digital signature and timestamp), or that they fax it to you if they have a fax. If they do manage to talk you into paying, let them know that you will cancel the check if you do not receive that letter. Otherwise, they will take your money and screw you over.
