What Creditors and Bill Collectors do NOT Want me to Tell You

Ah, the age of communication. A respected colleague of mine posted a Reader's Digest article on their Facebook page. The link to the article : http://www.rd.com/slideshows/13-things-a-debt-collector-wont-tell-you/?v=print .

Fair enough reading; bullet points and all. However, this simply skims over the overall picture of how everyday Americans should arm themselves with knowledge concerning how to respond to a creditor and debt collector. Each state has different levels of protection for their citizens when it comes to debt collection; from both the creditor and their agents (read: bill collector).

The first seven years of my post-law school career were spent in a collection agency; overseeing bankruptcy, compliance, and all areas concerning the law/regulations affecting the job. The first thing a collector does not want you to know; THEY ARE NOT THE FINAL AUTHORITY. Many of the best bill collectors create the aura of their authority over the "account"/"obligation"/"debt" and how that specific matter will be collected from you. As an individual, on the other end of the phone, you need to keep in mind certain rights; 1) They can not threaten to sue me unless the creditor intends to 2) They can not say they are an attorney if they are not one 3) They can not threaten me with imprisonment 4) They can not threaten to do something the law does not allow. All of these facts, regardless of the tales being told to you, remain throughout.

The most important thing a person has to realize is that should they fall behind on an obligation (be it a credit card, personal loan, or the like), that obligation does not go away. Yes, there are statutes of limitations that govern the length in time a person can be sued, however, the fact of ignoring the bill you got behind on puts one in a precarious position. You go from being a "customer" to a "debtor". The person you owe the money to is the creditor at that point; and they would like to get paid. You can convey the reasons why the bill is behind, however, their interests and concern begin and end with how much you owe, how much can you pay, and when will that payment come.

This also holds true when the creditor turns over the efforts of getting paid to someone else, a "third party", often referred to as a debt collector. The state and federal government have established laws over how these individuals conduct their business. If you wish to learn them, please do look them up on the FTC website. The overall gist is spelled out in the link above.

This is where things get tricky. The creditor and collector's greatest weapon is the level of pressure they can exert to force someone to pay. That pressure would be called harassment by some, "collection efforts" by others. Daily calls in states where it is allowed, letters to the home, even some have resorted to knocking on the door in the past. What they rely on is the perceived thin skin of the "debtor" to not be able to deal with the volume of calls and letters.

Combine the perceived thin skin with the fear of the unknown as to what can happen next. When I oversaw a collection team; our greatest weapon we honed was the fear of the unknown and we being the only ones who can control the unknown consequences from happening. Think of it as a squeaky wheel getting the attention. We wanted our wheel to be the one controlling the entire ship. There are ways you can quiet the squeaky bill collector wheel; sending a cease and desist letter and making sure they have received it being one such method.

SO, what do you do? You arm yourself with information. Make sure the bill they are trying to collect from you is valid; and that means you recognize the creditor and agree to the amount owed. Ask for this information in writing. Make sure you are aware of the consequences you created by ignoring the bill to this point in time and then make yourself aware of further actions that the LAW allows the creditor to take.

What the credit card companies do not like to admit is they can not first hand take any effort to make you pay the bill once it falls behind. A credit card company can not repossess your car; who you owe the money to for that car can. The credit card company would have to go to court, obtain a judgement, and then be able to collect on that judgement before having a chance at your possessions. Obviously, someone in the unfortunate position of being behind on their bills should act sooner rather than later; do not allow the creditors to reach this point.

There has been a wealth of information provided by the government, debt settlement companies, and consumer advocates concerning the collection of past due bills and how Americans should deal with them. Unfortunately, if you do fall behind, you most likely will hear from who you owe; or the debt collector they hire to remind you (as often as possible) about that very bill.

What the creditors and bill collectors do NOT want me to tell you is to educate yourself. Educate yourself about how much you owe on their particular bill, and all others. Educate yourself on what your state allows a creditor to do once someone is behind and cannot pay the bill. Educate yourself about the option in speaking with an attorney. More and more people are turning to bankruptcy as a way to free them of the overall debt burden; not just the one bill that you keep receiving calls for this week.

The best defense is a good offense. This is true in sport and finances. Build your offense in knowing the laws and your financial picture. If you have ignored bills thinking they were going to just go away; build your offense in knowing everything about what you make in income, what you need to survive and care for loved ones, and what you owe to creditors. Make yourself aware. A person who is aware about their rights, about their financial picture, and about what can be done; this is the collector's worst "debtor".

Lastly, the one dirty secret that no creditor or collector will tell you; you control your own financial picture. You control your wallet, you control your obligations, you can control how creditors and collectors communicate with you. The trick is, especially if you have been ignoring those obligations, take. back. the. control.

And, if you feel these bills are overwhelming; reach out to an attorney. I unfortunately have seen where clients feel that if they "just took care of this one bill", everything else would be OK. If you face bill collectors, lawsuits being threatened, etc; reach out to an attorney in your state. We are here to help you take back control of your finances and get the fresh start in life you now feel can never come.