A Quick Primer for Dealing with Collection Agencies

I just spent a long time on the “HELP I owe money to a collection agency” part of the Internet, and just so you know, it’s dire. And rather complicated! Especially once you get to the “HELP I just got served papers and am being sued by the collection agency” part of the Internet. For now, what to do if a collections agency is up in your grill:

1. First of all, if you ignore them, they won’t go away. So forget that right now.

2. But you can screen their calls and hang up on them until you’re ready to talk (perhaps while you are gathering a sum of money to offer them).

3. To get them to stop calling you, write a cease and desist letter. (Google “cease and desist letter” and copy one of templates.) Actually go to the post office to send this so you can get a notification of receipt (annoying, but crucial). They have to listen! The Fair Debt Collection Practices Act is on your side.

4. When you do finally talk to them, don’t listen to anything they tell you. They can’t garnish your wages or kidnap your baby or send you to jail (yet). Though if it’s a car loan that you’re defaulting on, they can totally take your car. That’s called repossession, and that’s legit.

5. Try to negotiate! Talk to them on the phone and say: “I can’t pay X, but I can pay Y, where X is the total balance and Y is a really tiny percentage of this balance.” They’ll say no to Y, but will hopefully say yes to Z, which is also a percentage of the original balance, maybe not tiny, but larger. If you can’t pay Y or Z, ask about a payment plan. They don’t get paid unless you pay something, so say you want to pay something. Bat your eyelashes, over the phone. Try to work it out.

6. If that doesn’t work, they might sue you. They can do this, and it is not a joke! But the good news (“good news”) is that once the courts get involved, you no longer have to deal with the collections agency. In fact, it’s no longer an option! If you get a court summons, the only way to deal with it is through the court. And ignoring it is not an option. I know I said that before, but that time it was an option, kind of, an option that led to your court summons. If you ignore the court summons, it will lead to police people taking you away for failure to appear in court like this lady.

7. Respond to your court summons. It will have a deadline on it. Meet that deadline. Again: If you ignore this, someone will put you in jail, and it will be terrible. You still might not have to pay (I think?); it seems that way. There are ways around this. I am not a lawyer. I am not your lawyer. You should probably get a lawyer. Or you can fly solo by following the instructions on this very legit looking website.

IN SUM
1. Pay your bills
2. If you can’t pay your bills, offer to pay part of your bills
3. If you can’t pay part of your bills, get on a payment plan
4. Hang up on debt collectors, but also negotiate with them
5. Do not ignore the U.S. court system, or you will go to jail

Photo Credit: flickr/mybulldog

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