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Mistakes to Avoid When Dealing with Debt Collectors

02-26-2020About MortgagesEddie Knoell

In this episode, we went over some tips that we hope will help you through those sticky situations when collectors are calling about debt.

Do you have to take a debt collector’s call?

No. Thankfully, you don’t.

When a debt collector calls we suggest that you put in writing something along the lines of, “Listen, we wish not to be contacted. You’re infringing upon our rights. Do not contact us.” They are obligated to listen to that.

That being said, they will still reach out to you when it comes to giving you updates on legal statuses or situations, if something gets moved up to the courts for example or where your account sits. They still have the right to inform you of cases like that. But in terms of constant barrage, you can get that to stop.

What are the limits and rights on debt collectors can and can’t do?

Debt collectors are allowed to call you between 8:00 am and 9:00 pm as long as you’ve not be that due not call list.

They also cannot threaten you in any way, which is a fear that many people have. They cannot come to you and say things like “Well, this is what’s going to happen to you if you don’t do such and such.”

As well they need to make their identity very clear. They have to identify who they work for, maybe even an employee number.

How do we know that it’s not a scam?

Unfortunately, sometimes debt scams do happen. So, make sure that the debt is actually yours. If it says that there was an expensive flower arrangement ordered in Ohio and you’ve never stepped foot in Ohio, there’s a pretty good chance that it’s not yours. There’s nothing wrong with you confirming that you are in fact the debtor, that it has got your name on it, and that you’re familiar with what the transaction was, et cetera.

What about settling for a different amount or asking them to remove it all together?

Often when a collector is calling you that debt has been purchased. Let’s say they bought it at 10 cents on the dollar. So, if you’ve got a $100 medical bill, they bought it for $10. So, you can actually negotiate with them so that they basically purchase the debt for a percentage, where they can still make a profit, but you are not paying the full amount. While we suggest paying off your debts, you can say, “Okay, I know you say that I owe you $1,200, but why don’t we agree on X?” So, you can do that.

But if you do that be sure to request that it is “removed from the bureaus.” Is an important part of negotiations. There’s a monetary negotiation and then there’s a credit negotiation. So, you can get into both of those. If they say, “Well, we can’t provide that for you until you pay it,” that’s ridiculous. All their letter would say is if X person pays Y amount to the creditor, the account will be paid in full. So, don’t let anyone tell you, “Well, you have to pay it first before you get that letter.”

And always, if at all possible, get this in writing. Some collection companies will say no. So, in those cases you’re going at it at your own risk. But if you have someone on the line saying that they’ll remove it and you’re willing to at least settle, it’s probably worth the risk.

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.


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Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.