Tactics That Credit Collection Agencies Can and Cannot Use

Most of us have been there at one time or another - getting a call from a collection agency about a past due debt. It usually happens with people who have just graduated from college or newlyweds, where in both cases they barely have two nickels to rub together, and find themselves with debt that is starting to get out of control. With everything else going on at that point in your life, for some reason paying financial obligations on time is placed lower on the priority list.

Credit collection agents have heard every story in the book. They are usually surly and don't want to hear about the operation your dog recently had. They will usually ask for the reason that you fell behind, but this depends on what LEVEL of collections your account has gone into.

At the first level, it is the collections department of the creditor itself. These agents are typically nice because they want to keep your account, although they want it brought back up to date. They will ask why you fell behind in payments, and if necessary, perhaps even have authority to work something else that will make things easier for you, at least temporarily. The second level of credit collections is where the creditor has closed your account because it is so seriously past due, and has turned your account over to a collections agency. For creditors, this is almost a last resort, because the collections agency gets paid based on how much they are able to collect. For example, if you owe $5000, the collections agency might get as much as half of that or more for their efforts in collecting it from you.

As either of these two areas of credit collections try to contact you, there are certain things that they absolutely cannot do, while other things fall into a gray area. If they talk to your employer or your boss or even your neighbor, they are absolutely not allowed to mention that this is in regard to a debt. They can say they are trying to confirm your address or some other such statement, but they absolutely cannot mention anything about this call being about a past due account.

These credit collection agents also may not contact you before 8am or after 9pm unless you have given them permission to do so. If you notify them in writing that you are being represented by an attorney and give them the attorney's contact information, they may not contact you at all but must go through your attorney. They may not threaten you with bodily harm or insinuate that harm will come to you if you do not work out some type of settlement on this past due account. If the account is in dispute as far as the amount owed, the credit collections agency has the duty to provide you with written proof of the debt.

Sometimes a call like this will come out of a clear blue sky. You religiously pay your accounts every month and that task is at the top of your priority list. Then you get this call from the collections department about a seriously past due account. What? The cause of this could be attributed to identity theft, which is one of the fastest growing crimes of this century. Someone else opened this account using your name and information. For more details on identity theft, how it occurs and what you can do to prevent it, you may wish to visit Preventing Identity Theft.

If you have multiple accounts that are seriously past due, whether personal or business, you may need to consider bankruptcy. This should not be considered lightly since it is much more serious than declaring bankruptcy in a game of Monopoly, and you should thoroughly investigate all possible options and alternatives before you take such a drastic step. For more information about bankruptcy and your options, you may wish to visit Understand Your Bankruptcy Rights And Options.

In the end, you will be required to pay the amounts owed, but if you work with your creditor BEFORE it goes to a third party collections agency and keep the doors of communication open with your creditors, you will have many more options that can help you get back on your financial feet.