Working with Debt Collectors and
Presentations text content in Working with Debt Collectors and
Working with Debt Collectors and Collection AgenciesSlide2
This presentation has been prepared by a grantee of the Foundation for Financial Planning for the purpose of educating student pro bono financial planners who will be working with their peers and community members. This presentation is for educational purposes only. All information provided in this presentation will be general in nature and may not be applicable to individual cases.
Someone who regularly collects debts owed to othersOn average, a debt collector will make 800 to 1,000 phone calls a week On a given work day, they may speak to 50 to 60 people
What is a debt collector?Slide4
Fair Debt Collection Practices Act of 1977Designed to protect consumers from abusive, unfair, and deceptive practices used by third-party debt collectors
What federal law applies to consumers?Slide5
Things consumers should know:Debt collectorsCannot use profanityCannot use deceptive statementsCannot disclose the debt to anyone besides youCannot threaten you in any wayCannot divulge specific information on a recorded message - especially at a workplace
Fair Debt Collection Practices ActSlide6
Typically a debt collector will only call when someone is past due over 180 days or more on a bill.They will call on all types of debt, typically:Credit card debtPast due car loansMedical bills Student loans
When may a debt collector call?Slide7
8am to 9pm in your specific time zoneIf they call before or after, they are in violation of the Fair Debt Collection Practices ActA debt collector can only call you once a dayUnless they request to be called at a later time
What time can a collector call?Slide8
Five days after the initial communication, the collection agency will send out a written notice with:The amount of the debtThe name of the creditor to whom you oweA statement that unless the consumer disputes the validity of the debt, it will be considered valid
How does the consumer verify a debt?Slide9
Writing to the debt collection agency within 30 days of receiving the written collection notice The collection agency should stop all collections until the dispute has been resolved.
How can you dispute a debt?Slide10
Send a letter - in writing - to the collection agency
The collection agency can send one last letter after stating that:They will no longer contact the consumerThey might have to take special measures to remedy the debt
How can you cease contact with a debt collector?Slide11
Report any problems with a debt collector to your state Attorney General’s officewww.naag.orgAlso report them to the Federal Trade Commissionwww.ftc.govRequest to speak with the collection agency’s PresidentReport the agency to the CFPB
What can you do if a debt collector goes too farSlide12
Fair Debt Collection Practices Act gives you 30 days to clear the debt from the collection agency. Debt collectors must stop reporting a debt to a collection agency if a written dispute is received in 33 days.Certain collection agencies will give you additional time to clear the debt before it will report on your credit. Ex: 60 days instead of 30 daysAlways ask what day the collection will be reported on your credit report
How long before the debt goes to a credit report?Slide13
What does the collections process look like?
Debt Collectors typically
only have 6 months to collect a debt, before it moves to a second collection agency - unless you set up a payment plan with them and are making regular payments.Slide14
Monthly incomeMonthly expenses:Rent or mortgageCar payment(s)UtilitiesFoodDebt collectors will not take into account frivolous expenses:Cell phoneInternet/cable
Information needed to set up a payment planSlide15
Tips on how to deal with a debt collectorSlide16
Only set up a payment arrangement if you REALLY think you can do it. If you need to change the date or amount of the payment, just call and ask.Just be honest with your debt collector.
Avoid making commitments that cannot be keptSlide17
As upsetting as a debt collection phone call can be – answer the phone!The debt collector might have the wrong phone number or person. If they do have the wrong information, let them know. If the debt collector is looking for you – Verify your information and decide if you can set up a payment plan or pay in full.
Answer a debt collector’sphone callsSlide18
This immediately will stop the collector from listening to you and helping you take care of your debt. If you continue to swear, they will end the phone call.
Avoid using strong languageSlide19
Remember the Golden Rule: Treat others the way you want to be treated.If you are unkind to a debt collector, they will be less willing to help you in your situation.
Communicating with a debt collectorSlide20
The FDCPA protects you from abusive third-party collections.Debt collectors want you to pay off your debts as much as you do!
Federal Trade Commission. (2011). The Fair Debt Collection Practices Act. Retrieved from www.ftc.gov/os/statutes/fdcpa/fdcpact.shtm Federal Trade Commission. (2009). Federal Trade Commission: Protecting America. Retrieved from www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm Sasha Whitley, M.S., pro bono graduate assistant