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Debt collectors are after one thing—your money.
And, you know what? That’s okay. If you borrowed money, then you need to pay it back. Collectors have the right to call you and ask you to pay back the money you owe.
But let’s be honest about debt collectors. You know they are lying if their mouths are moving.
Most of them will do anything—seriously, anything!—to make you pay your bills. They don’t care whether you feed your family and keep your lights on. All they want is to be at the top of your priority list. Nothing else matters to them.
Debt collectors have guidelines called the Federal Fair Debt Collection Practices Act—but from the stories we hear, it seems like many of them skate around these rules at best, and ignore them at worst.
Their job is to make you angry or scared—and they do it well. They know that if you get all worked up, you will act on that emotion and do something stupid, like pay them instead of buying groceries.
Collectors have a plan, and so should you. Stay calm. Don’t let some kid in a cubicle 500 miles away take control of your life.
Here are some of the basics that you should know about the Federal Fair Debt Collection Practices Act:
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- The Act states that harassment is illegal, and it restricts a collector’s calls to between the hours of 8 a.m. and 9 p.m. (unless they have your permission).
- The Act also allows you to demand that a creditor cease calling you at work. You should request this in writing by certified mail with return receipt requested.
- No collector or creditor may access a bank account or garnish wages without proper and lengthy court action, except in the case of delinquent IRS or student loan debt. All such threats are a bluff.
- Collectors cannot contact third parties—such as family or neighbors—more than once about your debt, and they cannot discuss the details of your debt. This is illegal but not uncommon practice.
- Do not use a cease-and-desist letter except in horrible situations, because all negotiations stop and any hope of positive resolution is lost.
You can read more about your rights and the limits of collectors by visiting the Federal Trade Commission’s website.
Remember, dealing with collectors is not about getting out of debt. You need to pay the debt you owe—but not at the expense of life’s basic necessities. Download some of our free budgeting forms, and make a plan.
The last person in the world you want to talk to is a debt collector. Know the law so you can prevent them from abusing you and your rights.
In Financial Peace University, Dave Ramsey devotes a whole lesson to showing you how to handle collectors when they call. Learn more about the class and how it can help you take control of your money—for good.