From unexpected expenses to healthcare emergencies, there are many unforeseen events that can send your finances into a spiral. If you’re struggling with unpaid medical bills or failing to make minimum payments on that credit card that you had to max out, you may end up being contacted by a debt collector. Here are a few tips to help you navigate those phone calls.
Don’t Commit To Immediate Payment
Making a payment on an old debt could restart the statute of limitations which would give the collector more time to take legal action against you. Before you make a payment, ask for written verification of the debt along with a formal payment agreement.
Verify The Debt Is Yours
Even if you suspect the debt being collected is valid, you should always verify and check if it’s still legally collectible. Debt validation must be provided within five days of initial contact and should include the original creditor’s name, the amount owed, and your right to dispute within 30 days.
Don’t Provide Bank Information
Under no circumstances should you ever provide a collector with your account information. Though they may claim that it’s the simplest way to pay your debt, it could lead to unwanted consequences like unauthorized withdrawals. Only use secure payment methods that you can track.
Stay Calm
Dealing with debt collectors can be frustrating and at times infuriating. While you might be tempted to lose your temper and say something rash, this could cause more trouble in the long run. Keep calm and let cooler heads prevail in resolving the issue.
Know Your Rights
Simply telling a debt collector to stop calling you won’t make it a reality, but you can exercise the rights afforded you under the Fair Debt Collection Practices Act. This allows you to send a written request to the collector to cease communication. Keep in mind that this doesn’t forgive the debt or prevent future legal action.
Debt can have a profound impact on your future finances. Not only does the compound interest on credit cards balloon to outrageous amounts, but it also affects your credit score which dictates your ability to borrow and how much it costs to borrow. If you need help getting out of debt and getting your finances on track, reach out to an FRC® trained advisor.
