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Few things are more stressful than hearing from debt collectors. They’re even trained to ramp up the stress, playing on your guilt, and shame about your financial situation to get whatever money they can get out of you.
Past a certain point, paying debt collectors is rarely profitable, so you might opt to stop speaking to them altogether. Still, anyone can pick up a call they didn’t really want to take. If you find yourself dealing with a debt collector, remembering these 3 things will help you protect yourself.
#1) Don’t give them your work number.
Don’t be fooled by the bored, matter-of-fact, this-is-a-routine-question tone debt collectors adopt when they try to get this information from you. You do not owe them your work number.
If you do, they will call you and get you in trouble with your boss for taking personal calls at work, even if you only end up saying something like: don’t call me at work. Giving them your work number also verifies your employment, which means assets they can go after if they decide to launch a lawsuit.
#2) Don’t give them post-dated checks or ACH agreements.
Past a certain point, paying debt collectors ceases to do you any good. If you have realized you’re probably going to need to file bankruptcy you’re better off using that money to pay for your own expenses.
It’s fine to make a payment arrangement if that’s what you want to do, but recognize they will want to keep your credit card on file, or they’ll want to get your banking information. Some unscrupulous collectors will go ahead and take the full amount right out of your bank account despite any arrangements you might have made.
Bank accounts are assets too, so doing this also verifies your assets.
Post-dated checks are even worse, because the date on the check does absolutely nothing to prevent the collection agency from depositing it right away. Some will do it out of greed, some will do it out of carelessness.
If you are going to pay them, use a debit card. The money will come out that day, and they won’t be able to charge it a second time. If they cross the line, you’ll be able to dispute the charges, as well.
#3) Verify the debt.
There are plenty of collectors out there who aren’t even chasing you for real debts. Sometimes they chase you for debts you’ve already paid off. Sometimes they are chasing you for someone else’s debt.
Always get the name and address of the original creditor and the date of your last payment. Ask them to verify the debt and contact you via mail.
If the debt is old, you may be able to safely ignore it. Debts created with promissory notes have a 3-year statute of limitation. Debts created through oral contracts have a six year statute. Credit cards have a 5-year statute. They can’t sue you for the debt, and it’s not impacting your credit very much. Why pay it at that point? The original company isn’t losing anything: they have already gotten a big break on their taxes for that money.