Debt collectors can be relentless.
Collection agencies pursuing debts on behalf of a creditor employ a number of methods to get their client paid, including letters and even lawsuits that may lead to asset seizure or wage garnishments. Of course, most simply call. A lot.
I completely understand if you’ve disconnected your phone (or at least put it on vibrate). After all, not answering is certainly better than picking up and letting loose a torrent of four-letter words! But if you do decide to speak with a debt collector, here are some important things to remember.
Know Who You're Dealing With
When you initially become delinquent on an account, a representative from your own creditor’s agency may contact you. Most creditors will try to handle the situation internally for at least 90 days and maybe as many as 180. Beyond that, they will likely outsource or sell the account to a third-party collector. These companies are notorious for taking advantage of unwary consumers who make verbal agreements over the telephone, so always be sure to get everything in writing!
Try to Be Cordial
I know, this is easier said than done. When someone is hounding you for money, it’s natural to go on the defensive. However, it’s important to remember that most debt collectors are simply doing their job and trying to get their client what’s owed to them. While some debt collectors can be bullies, others may be willing to work with you. So, try treating them like a human being even if they seem alien to you. Explain why you’re behind on your finances, and detail any life events that have contributed to your delinquency. This will help them to see you as a real person, and not just another phone call.
Don't Give Out Too Much Information
Most debt collectors do not have information about you other than what’s on your credit report. You want to keep it that way! Never share details about your assets or other financial resources, and certainly don’t provide your employment information. Debt collectors can be pretty slick, and may try to acquire this information by casually asking for your work number. Once they have that, they can easily uncover your place of employment. With your employer’s information, collectors may try to garnish your wages if they can obtain a judgment.
Watch Your Socializing
Social media is great for keeping in touch with family and friends, but it’s also been known to do some damage. Through social media, debt collectors are often able to discover your place of employment, enabling them to hound you at work or again, garnish your wages. Be sure you keep your social sites private, and be wary of friend requests from strangers.
Test Your Negotiating Skills
Most debt collectors aren’t expecting you to say, “Oh, I’m ready to pay up in full.” Most are equipped to engage in some form of negotiation. This might mean a reduced interest fee or a lower monthly payment on the condition that you agree to a plan that automatically subtracts money from your bank account each month. Or, the collector may accept a lump sum payment that is far less than the amount owed. If you’re able to do either, this is a good way to make amends—just be sure to get the details of the agreement in writing, always!
Know Your Rights
Collection agencies are not allowed to discuss your situation with anyone other than you, your attorney, and in some cases, your partner or spouse. They can call friends and family—once—in an attempt to get contact information if you’re unreachable, but that is all. They cannot discuss your finances or disclose any of your personal info, and they cannot continue to harass these individuals.
Collection agencies also are not allowed to harass you. Some tactics, such as daily phone calls, late-night or early-morning calls, threatening language, and verbal abuse constitute illegal behaviour, depending on the province or territory, and you may have the ability to take legal action.
Consider Debt Consolidation
A Debt Consolidation Program is an arrangement where a credit counsellor will work with your creditors to help you pay off your debt over time. Your debts are combined and your interest is reduced (or eliminated entirely) to help make paying off your debts easier and faster. Best of all? No more collection calls! With a DCP, you’ll be able to safely take your phone off vibrate.
If a DCP sounds right for you, or if you’d just like to speak with a credit counsellor, Credit Canada is here to help. We treat every caller and each client with dignity and respect, and we work with you to help you achieve a stress-free, debt-free life.