Effective Ways To Deal With Debt Collectors

When it comes to stressful experiences, very few are as nerve-wracking as being contacted by a debt collector. Debt collectors often pursue debts by calling, writing letters, and sometimes by making door step visits. With such intense levels of contact, many people report feeling as though their personal space has been violated, and often complain of high stress levels.

Your Legal Responsibilities To Lenders

Each time you borrow money, you enter into a legally binding agreement. The agreement states that you will repay what you borrowed, plus any interest stated in your contract. In the instance that you cannot meet your monthly repayments, it is always better to negotiate with your lenders rather than ignoring them. Contact them to let them know you are struggling, and ask to make a lower payment until your circumstances change. As it is in their best interest to get their money back, the majority will agree.

Your Rights When A Debt Collector Approaches You

If you cannot meet your monthly repayments and do not inform your lenders that you are struggling, they will assume that you have no intention of meeting your financial responsibilities with them. When this happens, they will initially make several attempts to contact you. If their attempts to contact you are ignored, they are legally entitled to pass your debt to a collections agency. When you are dealing with collectors, they are obligated to conduct their behavior in accordance with the Fair Debt Collection Practices Act. If the debt collectors contacting you do not behave according to the guidelines set out in this act, you can report them to a financial ombudsmen.

Debt Collectors' Legal Powers

It is important to distinguish between debt collectors and bailiffs, and know the difference between their legal powers. Debt collectors can only enter your home when you invite them in, and even then they cannot take your goods without your consent. In contrast, bailiffs can. They must not call you too late at night or early in the morning. They cannot contact you at work, and they should not inform others of your debt - such as family members. A debt collector can only visit you once you have given them permission to do so.

How To Deal With Nasty Debt Collectors

Occasionally, collectors will not act according to the Fair Debt Collection Practices Act. When this happens, you can make a complaint directly to their company. Sometimes it is the case that it is a rogue collector, rather than a company behaving in an untoward way. If complaining to the company does not change their approach, you can contact your local trading standards department. As a last resort, you can inform the financial ombudsmen of their behavior. Make sure you use this as a last resort, as they only deal with complaints that have been approached in the manner outline above.

Negotiating With Collectors

If you find that negotiating with collectors is too stressful, you can use a debt management company instead. For a one off and small monthly fee, debt management companies will negotiate with your creditors to secure a lower monthly payment and freeze interest.

Ultimately, the best way to deal with your collectors is to pay off the debts you owe. By ignoring the problem you will make it worse, and any attempt to repay and negotiate will always make it better.