After years of steady decreases, the percentage of Americans with delinquent debt is on the rise again.
Per Creditcards.com and Federal Reserve Data, credit card delinquency rates hit a high in Q2 of 2009, at 6.77 percent before falling quarter after quarter to a low of 2.15 percent in Q3 2015. However, the latest data from Q1 2018 shows 2.54 percent of balances as delinquent, which the Federal Reserve defines as accounts that are 30 days or more past due.
Falling behind on debt is extremely stressful. The longer a debtor goes without resolving the situation, the more that stress and anxiety builds. When creditor calls start getting thrown into the mix, it’s enough to make the day to day unbearable.
To alleviate some of this stress, you need to understand how to handle creditor calls in the first place. Here are six steps that’ll help:
Know Your Rights
Assuming you’re past the point of being proactive with creditors and informing them of your situation, creditor calls are now your reality. First thing’s first: know your rights. According to the Fair Debt Collections Practices Act (FDCPA), debt collectors can’t do the following:
- Contact your employer or neighbors about your debt (they may only contact them to locate you but may not mention the debt).
- Call you late at night or at unreasonable hours.
- Call you at work.
- Call you repeatedly.
- Engage in deceptive conduct.
- Call you without disclosing their identity.
- Use obscene, derogatory, or insulting remarks.
- Threaten arrest or loss of child custody or welfare benefits.
- Publish your name.
- Use any communication, language or symbols on envelopes or postcards that indicate that the sender is in the debt collection business.
- Threaten self-help repossession without legal right or present intent to do so.
Write to Your Creditors
Again, under the FDCPA, you can write a letter to your creditor(s) asking for them to stop calling you. If a collection agency has committed any illegal activity toward you, state it in your letter. Debt collection agencies and attorneys must acknowledge your request after receiving your letter. Make two copies of your letter; one for your records and the other to send to the Federal Trade Commission Headquarters:
Federal Trade Commission
6th & Pennsylvania Ave.,
NW, Washington, DC 20850
You might receive some calls after sending the letter, but only for communication that:
- You’re being sued
- Your request has been received
- Their communication efforts are ending
If an in-house collection agency is pestering you, however, they’re not bound by the terms of the FDCPA like with collection agencies and attorneys.
Don’t Admit to Anything or Give Personal Finance Information
It’s perfectly OK to negotiate with the creditor or explain why you can’t make the payment, but in doing so, you should never admit that the debt is valid. Doing so could open up a new contract and statute of limitations. Likewise, be careful when explaining anything that you don’t share your personal finance information. You might think you’re talking to a certified collection agent, but if it’s really a scammer, sharing your social security number, bank account info or the value of property you own could make you a victim of identity theft. Keep personal income information broad and only share bank information if you’re actively making a payment.
Talk on Your Time
Creditors will keep calling, so there’s no need to answer when you’re stressed, busy with something else or in an otherwise less-than-ideal mood to talk. Should you answer a creditor call when you’re scatterbrained or overwhelmed, you could end up admitting to something, losing your temper or using foul language. All of these things will come back to bite you. Admittance could renew the contract on what you owe and force legal action. Reacting with poor behavior could hurt you should the call records be reviewed in a court.
Per Nolo, every time you receive a creditor call, write down the date, time, name of the contacting employee and the conversation details. This written log will be how you keep track of how often certain creditors call, when they call, and the consistencies of their stories.
Seek Legal Help or Debt Relief
If you’ve done everything you can, and the calls aren’t stopping, you have one of three options to stop the calls: seek debt relief through a debt settlement company, hire a lawyer, or declare bankruptcy.
Seeking the help of a debt settlement company isn’t a guarantee to end creditor calls. However, because you’d be working with a company to negotiate and settle your debts, it’s likely that creditors will take note of that and stop personally contacting you. Make sure the debt relief company is accredited by the American Fair Credit Council as is the case with Andrew Housser’s Freedom Financial Network.
When you declare bankruptcy, you’re protected from collection activity, however, debt collectors can still come after you if they receive permission from bankruptcy court, but not for unsecured debts (like credit cards). Declaring bankruptcy, while effective in stopping creditor calls, is a serious measure that should only be taken if you have a lot of debt and little to no options to pay it back.
Figuring out how to solve a difficult financial situation is only made tougher when our phone constantly rings to remind us. But like with remedying your financial situation, knowing the various strategies available and the rights you’re entitled to can make all the difference in making strides toward a solution.