When debt collectors use threats and lies to try to get you to pay, know your rights
Dealing with debt collectors is exhausting at best and terrifying at worst. Debt collectors rely on pressure tactics, urgency, and fear to get debtors to pay up—even when they have important legal protections. Too often, they count on fear, not facts.
The following provides general information on what debt collectors do and how to defend yourself against them. For more information, check out attorney Ben Matthews’ podcast, Debt Sucks. If you are dealing with debt collection or facing a lawsuit from a debt collector, contact us today for advice on your specific situation.
How debt collection works
Generally speaking, debts go into collection after the actual business you owe money to—whether that’s a bank, a healthcare provider, a utility company, or what have you—tries to collect and can’t. They then either hire a collection agency to collect the debt on their behalf or sell the debt to the collection agency, usually for pennies on the dollar.
Then, the calls start, often multiple times a day, trying to squeeze every last dime out of you.
Unethical (and illegal) tactics debt collectors use – and how to push back
We’ve heard over and over again from debtors who were harassed by debt collectors who used misleading, intimidating, or straight-up dishonest tactics, like telling people they would go to jail over debts they didn’t even owe. They are pros at psychological warfare; they want to scare you into handing over money just to shut them down.
Here are some things debt collectors are legally not allowed to do:
- Call you before 8 a.m. or after 9 p.m.
- Lie and say you’ll go to jail.
- Harass, threaten, or yell.
- Call your employer if you tell them not to.
- Talk to anyone else about your debt.
If they break the rules, you can file a complaint and potentially even a lawsuit against the unethical debt collector. But too many debtors don’t know their rights, and the debt collectors know it. That’s why they do whatever they think they can get away with. You need to know your rights and options in order to shut them down. For instance:
- “We’re going to garnish your wages.” They can’t do that unless they’ve sued you and gotten a judgment against you. You’d know if that happened, because you would have been served.
- “We’re sending the sheriff.” Collectors can’t send the sheriff to arrest you for unpaid debt. That’s a threat, and a lie.
- “You’ll go to jail if you don’t pay.” This isn’t the 1800s; debtors’ prisons are no longer a thing. Again, this is a lie.
Your game plan should be simple: stay calm and document everything. Ask for a debt validation letter—proof of the debt in writing—and get everything in writing. Make it clear that you aren’t someone they can push around, and they will usually back off. And remember, you can hang up at any time. If a debt collector is trying to threaten you, harass you, or wear you down, just end the call.
If the debt is legitimate, and you can afford to pay something, then you can negotiate. But don’t pay what you can’t afford, don’t pay anything on a debt before they confirm its validity in writing, and above all, never give a debt collector access to your bank account.
If you’re dealing with overwhelming debt, bankruptcy can be a fresh start
A debtor’s most powerful weapon against debt collectors is bankruptcy. As soon as you file a bankruptcy petition, the court will issue an “automatic stay” that shuts down all collection activities. In Chapter 7 bankruptcy, most types of debts can be discharged (eliminated), usually within about four months.
In Chapter 13 bankruptcy, your debts will be rolled into a repayment plan with an affordable monthly payment, with a discharge of remaining debt once you complete the plan. Either way, you don’t have to deal with debt collectors, and you’ll be on the path to financial freedom.
Dealing with debt collectors is never easy, but you don’t have to do it alone. Talk to an experienced bankruptcy attorney at Benjamin R. Matthews & Associates, LLC today.
"Once they started my case, it was less than a week before my creditors stopped with the harassing calls and emails. Everything after that went fairly smooth. I’m very satisfied with the experience." – Martin R., ⭐⭐⭐⭐⭐