It's bad enough when you're deeply in debt, and paying your bills is the last thing you think about when you go to bed and the first thought when you awaken. But debt collectors are masters at magnifying your grief. Some will expertly apply their tools to wear you down, like calling constantly and at all hours, threatening you, and being vulgar enough to make a sailor blush.
Other companies have devolved debt collection to a new low. Forget "three strikes and you're out" or even one strike -- they sue first and ask questions later. I've written about these companies and need not repeat it here; instead, I want to discuss what to do if you find yourself in the crosshairs of a debt collector and think it may get serious enough to go to court. Following these seven points is the best way to stay out of court, or prevail if you do get there.
1. Notify the collector that you're recording the call. We've all seen shows where a debt collector was stupid enough to leave a hideous message on someone's answering machine. Most abusive collectors are smarter than that and want to be able to deny that they were ever abusive. Therefore, if you have recording equipment, then as soon as you know the call is from a debt collector, start the recorder and say: "I am recording this call." Don't ask for permission but just state it as a fact, which the government says is OK. If you want, you can add: "I will talk to you as long as you're respectful. The second you begin to harass, I will hang up."
What if you don't have a recorder? Then say it anyway! They don't know that you're not recording it, and you'll be in the tiny fraction of people who just put the debt collector on notice. Do this for every call with a debt collector.
2. Agree within your family on who will talk with debt collectors. That's because they often will fish for information about who has a job and what assets you have. It's much better to have one person control that information and not let them "divide and conquer."
3. Ask for proof of indebtedness if you're unsure you owe that debt. Shoddy recordkeeping is rampant in the industry and just because you got a phone call doesn't mean you necessarily owe the money. Say: "I don't know who you are and I don't know that you own the debt. Before I give you one nickel, prove to me in writing who owns and owes that debt." Don't pay anything until you receive it. It's your right.
4. Document everything. Ask the name of everyone who calls you, and note the time of the call and anything you or they agree to. It's a pain but it also can help you later to prove harassment if it occurs.
5. Open your mail! This sounds silly, but it's vital. Many people are so pained by their debts that they ignore the letters they know are from debt collectors. Big mistake. A letter might be a notice to appear in court, and if you're a no-show, now the court can slap you with a default judgment and really make your life hell. So open the mail and make sure you know if you're supposed to show up somewhere.
6. Know the statute of limitations before making any payment at all. If the debt is several years old, it may be "time-barred," and past the point where they can sue to collect it. That period varies by state, so check the rules in your state. Some debt collectors would prefer that you don't know this fact, and may even ask you to make a token payment of a few bucks. What they don't tell you is that any payment will reset the clock and make the entire debt collectable again. Only make the payment if you know what your rights are.
7. Know the resources available to help you. Be sure to read your rights and the resources available at your state attorney general's office, the Federal Trade Commission, and the Consumer Financial Protection Bureau. They're very aware of abusive debt collectors and have potent weapons to fight them, but only if you speak up.
If you do go to court and have not yet received clear documentation that you owe the debt, now's the time to say so! Some debt collectors know they don't have adequate proof, but are hoping you'll be intimidated enough to pay anyway. No matter how scared you may feel in court, it's your right to demand proof.
The only thing worse than an abusive debt collector is a consumer who allows the abuse because he didn't know his rights. Until comprehensive reform comes to this industry, it's up to you to stand your ground.