Bank finance articles and tips

If you're like most people, the last thing you want to deal with is credit harassment. Debt collection efforts by collection agencies have hit an all-time high for two reasons. First, many people are struggling to pay their bills since the downturn in the economy, and next, bill collection has become big business. In fact, collection companies in the U.S. now collect billions in overdue debt every year.

But those debt collection efforts can quickly become credit harassment if you're not careful. Here are five tips that will help you stay ahead of debt collection efforts.

Negotiate

The best way to avoid credit harassment is to avoid having to deal with collection agencies in the first place. If you find that you're getting behind on your bills, contact your original lender and offer to work things out with them, either by setting up a payment plan on the past due amount, or by extending your pay period. By doing this, you won't have to deal with debt collection agencies because the lender will have no reason to turn over your account.

Face It

Many people don't want to deal with collection agencies, so they'll simply ignore a collection letter. Oftentimes, that can cause things to escalate into credit harassment. For instance, if you receive a letter and ignore it, that gives the debt collection agency the right to assume the debt is valid, and they may be able to take you to court over it. Instead, face the situation head on and take charge by knowing your rights under the Fair Debt Collection Practices Act.

Document It

Whenever you're dealing with debt collection agencies-especially if it's escalated to credit harassment-you should be sure to document every interaction you have with the bill collector. If you communicate by mail, make sure to send everything certified mail with a return receipt requested. If you're dealing with them by phone, and your state allows it, record all conversations with them so that if you have to take them to court for harassment, you'll have your proof in order.

Know Your Rights

The Fair Debt Collection Practices Act was designed to help consumers when they're dealing with debt collection agencies that go too far when trying to collect a debt. But unless you know the law, you won't understand when you've become the victim of collector abuse. Once a collection agent realizes that you understand your rights under FDCPA, they will likely back off, and you'll soon find that you're no longer a victim.

Draw the Line

If you find that a bill collection agent has gone too far, there are steps you can take. First, you can report them to the Federal Trade Commission, and then to your state Attorney General. If the credit harassment still doesn't stop, you should look for an attorney who is familiar with the FDCPA and ask if you have a solid case. If you win your suit in court, the collection agency will have to reimburse you for your costs, plus pay damages.

Sergei Lemberg, Esq. is the Principal of Lemberg & Associates, a law firm specializing in fair debt collection law, lemon law, and other consumer law.

By Sergei Lemberg, Esq.