Debt Collectors - Dealing with Debt Collectors

In today's troubled economy more people are struggling under huge debt loads than at any other time in history. The boom years of the last 2 decades made it very easy for almost anyone to get a credit card or a bank loan for any reason, before long people had several credit cards, a mortgage and a car payment. As long as the job was going well making the payments was not a problem.

Suddenly many people have lost their jobs or had their hours cut and are unable to pay their bills and it does not take very long before the debt collectors start calling.

Most companies will try to contact you and work out a plan for you to continue paying them; if you continue to ignore their requests for payment they will eventually sell your debt to a collection agency. At this point the rules of the game change and you are left dealing with debt collectors, which can be a less than pleasant experience.

Most companies will only sell your debt to these debt collectors only as a last resort when they have decided according to their policies that it is no longer financially viable for them to pursue your debt.

At this point they sell your debt to a collection agency for a very small fraction of what you owe, often as little as 5 or 10%. The debt collector will then take on the responsibility of collecting the money owed and more often than not will settle for as little as half or less of the amount you owe. Even if they only recover 20% they have doubled their money.

Dealing with debt collectors can be a very unpleasant experience as they can be aggressive and intimidating to talk to on the phone or in letters that they send you. According to the law they are not supposed to threaten you or call you at times that can be considered harassing, but many of them skirt along the edges of the law and can be quite nasty on the phone. If you feel that they have stepped over the line you should contact the authorities and report them.

You can make arrangements with the collection agency to pay your bill by sending them a letter explaining your current financial status. This letter should include your monthly income, your monthly bills including living expenses and what you can afford to pay each month. If you do this and they agree to it you can avoid the penalty charges they will run up against your debt for every month you do not pay.

If you choose to continue to ignore the debt collector, they may assess penalty charges against your original debt that can add up rather quickly and they can have the courts issue a summons. The summons will be followed by a notice of default and an admissions form, which is your last chance to make arrangements before you are taken to court. If you do not pay the debt you are going to have to appear before a judge and try to convince him that you cannot afford to pay the debt off or that you can only afford to pay so much per month.

If during the process of collection, you feel that the debt collector has gone beyond the bounds of treating you properly and legally you are protected under the Consumer Credit Act of 1974, which offers directives explaining what debt collectors can and cannot do when attempting to collect a debt. Many of them rely on scare tactics to get you to pay your debt under the assumption that most people do not know their legal rights.

If you can prove by recording the phone call or having a witness to a personal visit that the debt collector has used verbal harassing techniques you can report them to you local council's trading standards department, if they have threatened you physically you should call your local police department.

The best option is to contact a Debt Advisor who can help you to establish a repayment plan for all of your debt so that you can pay off all of your credit cards and loans at a rate you can afford. If you do this, according to UK law the debt collectors must agree to abide by the repayment plan and settle for the amount that the plan pays them every month without contacting you again. This type of repayment plan will leave you debt free in 5 to 6 years and free you from the debt collectors calls and letters.