How To Deal With Debt Collectors When You Can’t Pay

How Do I End Up at Debt Collection?

If you don’t make payments for three to six months, the creditor may sell your debt to a collection agency. This is actually a huge market and allows the company to write off your debt while you are still required to pay the bill, now to the debt collectors.

If you are late making payments or are sent to collections, your delinquency is reported to credit reporting agencies. This action will hurt your credit rating more than any other action you can take!

The debt collectors buy your debt for a decreased amount, so you may be able to negotiate a lower total payment. If you can not repay your bill, the debt collector may be willing to negotiate with you. Will it hurt your credit to negotiate? Yes, but so will defaulting on a debt.

If you can negotiate with the original creditor before you are sent to collections, you may be able to work out a decreased payment schedule and avoid taking a hit on your credit score. 

Chat with one of our debt experts today to find out more about our debt relief program

Working with A Collection Agency or Debt Collector: A Guide

The federal Fair Debt Collection Practices Act (FDCPA) protects you from harassment by debt collectors. Your state may have additional protections - these usually deal with business debt and with original creditors. If your state has a FDCPA law it will be noted on the state page.

We list what actions a debt collector can not take in the next section. If you have a debt collector who is in violation of this law, we’ll give you some suggestions on how to document and report it. 

What are Debt Collectors Allowed to Do?

The first and most important thing to know is that you have federally guaranteed rights and many states have similar rights. Here is what a debt collector cannot do under the Fair Debt Collection Practices Act (FDCPA):

• Contact you between 9 p.m. and 8 a.m. without your permission
• Threaten violence or using profanities when speaking to you
• Contact third parties (family, friends and employers) about your debt or otherwise embarrass you
• Speak to your employer except under limited conditions
• Pretend to be a government official or an attorney
• Send letters that look like attorney or governmental letters but that are not
• Send derogatory messages about you to a credit reporting agency
• Send information on a postcard or via social media
• Attempt to collect an expired debt
• Hire an unlicensed credit collection agency
• Communicate with you if you are represented by an attorney

What Do I Say to Creditors If I Can't Pay?

If you cannot pay, tell them upfront. They may be willing to work out a deal with you or they may even drop the debt. However, if you tell them you can not pay, but they later find social media posts, etc. that suggest you can, they will resume calling you to collect. 

What Should You Not Say to Debt Collectors?

This list includes things you should not do or say to a debt collector. 

• Make a good faith payment. This payment can restart the expiration clock
• Be rude to a collector. It can work against you if the phone calls are replayed in court
• Let your contact information get out-of-date (the debt collection agency can contact third parties to track you down)
• Admit that it is your debt or promise to pay – it can be construed as a contract
• Give out financial information like your social security number or the value of a property
  

What Should You Do 

While you are speaking with a debt collector, here are some things you should do:

• Take notes when you speak to a debt collector. Write down date and time, debt collector name, which debt, and what the debt collector says
• Keep all mail, copies of texts, etc
• Tell the collector if you legitimately can’t pay. They may try to work with you
• Tell the collector if the debt is not correct
• Give them your current contact information
• Consider telling the collector to stop contacting you. If you want to work towards a settlement, you may not want to take this step
  

What Steps Can You Take Once in Collections?

There are several options to get a debt collector to go away. Ignore the debt and calls. You may end up in court or the collectors may give up. This is not a good option.

Set up monthly payments – Because the debt collector bought the debt for less than it is worth, they may be willing to negotiate. If you want to try this, offer to pay 40 to 50% of the total amount. Make sure the get the following in writing:

• The amount you agree to repay and what you are repaying – are you paying against what you owe or settling the bill once you pay
• The name of the debt – make sure you are paying off what they think you are paying off.
• The collection agency should have the name of the original creditor and account number.
• The exact day the payment is due.
• The exact name of the collection agency since debt can be sold
• The effect on the account after payment. Will it be reported to a credit agency, etc. 

Debt consolidation requires you to take out a loan to pay the original debt. It may not be possible to get a loan if you are in collections. Debt management includes working with a credit counseling agency to learn to better manage money and pay off debts. Bankruptcy is a last resort to handle your bills. It is expensive and you need legal advice and representation.

Debt settlement includes signing up with a debt settlement company like Pacific Debt, Inc. If you qualify, a debt settlement company will negotiate with your debtors while you build a fund to begin repaying debts. You can also do this on your own, but it takes determination.

Conclusion

Dealing with debt collectors might feel scary, but you've got this! Our guide is here to make things easier, giving you simple tips and steps to follow. Just remember to keep everything organized, know what you're allowed to do, and talk things out clearly.

You're not alone in this, and there's always help around if you need it. By taking things one step at a time, you can handle debt collectors without too much stress and work your way towards a happier financial life.

Take Action to Deal with Debt Collectors - Work With Pacific Debt, Inc.

Pacific Debt, Inc can help you deal with debt collectors when you can’t pay and even offers a free consultation. Our debt specialists will perform an in-depth analysis of your debt and advise you on your options. They ensure that you understand all options and all the program details.

Depending on your financial situation, Pacific Debt, Inc works with you to have you debt free in one to two years. We do not make money unless your debt relief program works for you. You have nothing to lose and every to gain by contacting Pacific Debt for your free consultation.

For more information, talk with one of our debt specialists today.

*Disclaimer: Pacific Debt Relief explicitly states that it is not a credit repair organization, and its program does not aim to improve individuals' credit scores. The information provided here is intended solely for educational purposes, aiding consumers in making informed decisions regarding credit and debt matters. The content does not constitute legal or financial advice. Pacific Debt Relief strongly advises individuals to seek the counsel of qualified professionals before undertaking any legal or financial actions.

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