How Dealing With Debt Collectors Works

In late 2007, as the consumer credit crisis grew, credit giant Citigroup announced losses of over $5 billion. See more debt pictures.
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They break your thumbs if you don’t pay. They’re annoying and merciless. They care little if you lost your job or have family medical emergencies. They’re hardened professionals who employ all legal means of intimidation. They’re debt collectors.

There’s the popular perception of the debt collector, and then there’s the reality. The majority of debt-collection agencies play by the rules and make efforts to correct their own errors. True, if you’re in serious debt, collectors can make an already stressful situation seem unbearable. But with a bit of practical and tactical knowledge, you can come out ahead when dealing with them.

Dealing with debt collectors is becoming a common experience. Unforeseen personal circumstances and a recession-bound economy have compelled unprecedented numbers of Americans to seek help through debt consolidation and personal loans.

An unfortunate byproduct of this is the increasing number of unscrupulous debt collectors. Tales of unethical collectors are on the rise. Both the Federal Trade Commission and the Better Business Bureau report a dramatic increase in complaints about debt collectors in the past three to five years [source: Haley]. The most common complaints include cases of mistaken identity, illegal threats, incorrect debt assessment, badgering relatives and friends of debtors, and verbal abuse.


­But what can you do to avoid debt-collector harassment, short of switching off your phone service or allowing your unread mail to pile up on the kitchen counter? By following the steps discussed in this article, you can protect yourself and reduce the frequency of collector calls. Most importantly, make sure you know your rights under the Fair Debt Collection Practices Act, and take the time to learn how the process of debt collection works.