Debt collectors can be incessant. Their phone calls have become such an issue for so many that the federal government passed laws just to control their activities. If you are receiving phone calls from debt collectors, but do not want them calling you, you can stop debt collector calls. This guide provides you with the legal, foolproof methods to stop unwanted debt collection calls permanently.
Federal Law Governing Debt Calls
Congress created the Fair Debt Collection Practices Act (FDCPA) to define and describe the methods debt collectors can use and those they can't use in the collection of a debt. The Act covers a rather extensive list of items.
Debt collectors can't call you regarding a debt you don't owe.
They must provide you a verification of the debt within five days of your request of it.
Debt collectors who cannot prove you owe the debt, may not legally contact you.
Debt collectors who cannot prove you owe the debt, cannot report it to the credit bureaus.
You may only be contacted regarding a debt between the hours of 8 am and 9 pm in your time zone.
The collectors cannot call you at a time you state is inconvenient.
The collectors cannot call you repeatedly.
How To Stop Debt Collection Calls
While placing your phone number on the federal do not call list stops phone solicitation, it does not affect debt collection calls. So what does? You must communicate to the debt collectors that you do not want to be contacted by telephone to stop debt collector calls. No law mandates you to communicate via telephone with them.
You can communicate your desire to communicate in another manner besides telephone by hanging up on a them. If they continue calling you after you have hung up on them, they’re violating the FDCPA.
You can speak to them once to tell them that you do not want to communicate by telephone, but by writing. After that they must send you letters which puts everything in writing, a bonus for you if you have to go to court because the debt collector violates the FDCPA. This method will stop debt collector calls of those with scruples.
Send a cease and desist letter. You can stop debt collector calls from third-parties this way. The original company with which you created the debt can still contact you.
Calls Regarding Another Person’s Debt
When you change your phone number, you inherit a lot of calls from the last person who had that number. Some of these can come from debt collectors. It is good to remember that many calls about loan default and credit are scams. For example, the mid-2010s were plagued with fake Sallie Mae calls. The scam prompted the government related loan servicer to issue a press release and consumer warnings. Keep this in mind and even if you know the person who had the phone number before you, do not tell the caller any information. They could be a scammer trying to obtain information for identity theft. Online phishing sites using mock ups of the actual Sallie Mae site also try to obtain illegal information. Here’s what you should do to stop debt collector calls:
Let the debt collector know that they have a wrong number. Do not share your name since they could be conducting a phishing call.
Send a cease and desist letter as if it was your debt, however do not admit to the debt. Simply demand they cease contacting the telephone number. Send it via certified mail and request proof of receipt from the post office.
Report the debt collector to your state Attorney General and to the Federal Trade Commission, if the phone calls continue after they have received the cease and desist letter.
Another scenario occurs when a debt collector contacts you to locate a friend or relative who they say has a debt.
Typically, they find your contact information through a background check. Somehow, your contact information became intertwined with that person’s and now you need to stop debt collector calls concerning that person.
It is perfectly legal for a debt collector to contact you one time to obtain third-party information, such as an address, phone number, or employment information. Legally though, the debt collector cannot discuss their reason for calling – the debt.
More importantly, if the debt collector contacts you a second time or more trying to reach another party about the debt, they have violated federal law and you should report that agency to the your state Attorney General and to the Federal Trade Commission. At that point, the government will stop debt collector calls.
Debt collectors may contact you about third-party information or debt, if you are:
the individual’s attorney,
the parent or guardian of a minor with a debt.
If you want to stop debt collector calls like these you’ll need to go the cease and desist letter route again.
After the Cease and Desist Letter Delivery
The collection agency or debt collector gets one more opportunity to communicate with you after you send the cease and desist letter. This must be by postal mail. The letter will contain one of three results.
The collection agency will tell you that it has terminated further efforts to collect the debt.
They will describe specific actions they may take to collect the debt.
They will describe specific actions they definitely will take to collect the debt.
If the collection agency sends you any mail beyond this single letter, keep it for evidence. You can sue the collection agency.
Handling the Debt
Now that you have peace and silence again after having managed to stop debt collector calls, you can think about how to handle the situation. Relax knowing that you have many alternatives to deal with the situation.
Read the letter you requested that validates the debt. Check your own financial records to determine if you did take out a credit card or loan in the amount that is due. Financial lenders often merge with one another and change the name of the company. You may have taken out a loan from Bank X, but it now refers to itself as Bank A. If the debt is real and you owe it, you need to figure out how to pay it off.
Enjoy the silence and focus on figuring out a simple solution to the debt problem. It is much easier to think about and address any situation when you can take quiet time to think about it. Once you stop the badgering contact, you can form a plan to pay off the debt and get control of your financial future.
Regaining Control With Debtry
Let’s say you do owe a debt. Debtry can help you organize, budget and educate yourself, so that you can repay it.
An OfferEDGE brand, Debtry, provides tools and advice to help you live debt free. You can use it in conjunction with other OfferEDGE brands like Loanry, Creditry and Budgetry to create a unified financial plan for yourself.
Once you have educated yourself on Debtry, you can access its sister sites directly from there to handle various aspects of money management. Here’s a rundown of how to use them most effectively.
Creditry: Visit Creditry to get a handle on your credit. You can learn how to obtain copies of all three of your credit reports, identify and correct mistakes. You can also learn how to improve your credit score and more information on how to stop debt collector calls.
Budgetry: Visit Budgetry to plan a new budget that lets you repay the outstanding debt. This site provides advice and education on how to create a budget and what the appropriate percent of your income should go to each category, such as how much you should pay for rent.
Loanry: Visit Loanry to obtain a debt consolidation loan. You could consolidate all of your outstanding loans and credit cards and obtain the funds to repay them all at once. This simplifies your repayment since you will then have only one payment each month to make.
Debt Settlement Details
While many TV commercials make debt consolidation sound like the answer to your prayers, beware that there are scams in with the legitimate companies. Research online any company before you phone them and definitely before you sign any paperwork.
Debt Settlement Defined
The term debt settlement refers to when the creditor offers a lower repayment cost than the initial outstanding balance to consider the debt paid in full. You do not have to wait for a creditor to offer you a deal. You can call them and ask if they would be willing to negotiate a debt settlement. These negotiations benefit both parties. The creditor recoups some the debt. The debtor clears off the debt and receives improved credit scores. You stop debt collector calls permanently because you owe no money.
Some companies hire a third-party to negotiate these for them. Some debtors do the same thing. Sometimes, the creditor handles it themselves. Typically, the offer will include multiple options.
You can pay the full debt in 12 equal monthly payments.
Or you can pay 75 percent of the debt in six equal monthly payments.
You can pay one-half or one-third of the debt in one payment. The amount varies by company.
Fees for Using a Debt Settlement Company
While debt settlement firms do charge a fee, they do it at the end of the repayment or as a monthly charge taken from the restructured payment. There is typically not an upfront fee.
State laws govern whether a debt settlement company can charge fees upfront or any fees at all. Each state sets its own laws. Some states only let a settlement company charge fees if they are able to negotiate a debt reduction for you. A typical fee for a debt reduction company is 25 percent of the total debt enrolled in the program. That is 25 percent of the reduced debt, not the original.
While these companies do help reduce your debt, realize that they are on the side of creditors. They base your new monthly consolidated payment on your re-negotiated debt and your current income. If you lose your job or your hours get cut, you may not be able to restructure to a lower payment.
If you want to use a debt settlement company, you need to be prepared to enter repayment to totally stop debt collector calls. If you do not have the ability to pay each month, this will not help you. If you can enter a debt consolidation program, you can quickly stop all debt calls because every creditor who agrees to enter the consolidation also agrees to contact the organization handling the consolidation instead of you.
Another alternative is to obtain a consolidation loan. You can easily shop for a personal loan on Loanry. Your options will vary according to your status as a prime or subprime borrower. Your interest rate on a consolidation loan will vary between the prime rate and 25 percent.
Loanry, an online shopping mall for loans, lets potential borrowers submit a single mini-application to obtain an email with a short list of potential lenders for which they likely qualify. This reduces your research and simplifies your loan application process.
Each loan for which you apply carries an application fee. That’s why it makes sense to determine which financial institutions you stand the best chance with first. You reduce the number of application fees you must pay. Those can run between $25 to $50 each.
Obtaining a consolidation loan lets you completely pay off all of your creditors at one time. You’ll need to calculate what your total debt is before applying.
Combine Reduction Consolidation and a Loan
This option takes a little bit longer, but it reduces the amount you owe and it gets you a loan so that you can completely pay every creditor off at one time. Rather than having multiple creditors, you’ll then only have one. You’ll have one interest rate. You’ll have one monthly payment to make.
Tackle the debt consolidation with reduction first. You need to learn how much money you will need to borrow. The great part about doing this is since you’re reducing your debt, you won’t need to take out as large a loan as you would without using the debt settlement company.
Debt Settlement and Your Credit Score
Using debt settlement may at first negatively affect your credit score since the debt is still not paid in full. It does help increase your credit score over a period of time since it establishes timely monthly payments that occur on time. Using debt settlement can help you re-build your credit, a definite side benefit of an effort to stop debt collector calls.
Many debt settlement companies and non-profits require you to agree to close an account as soon as it has been repaid. This is a typical requirement. It can cause a negative effect on your credit score, at first, since it affects your debt-to-loan ratio.
Balance this with getting free of your debt though. Stopping the phone calls does not stop the debt, but negotiating and paying it off solves the whole problem.
Debt Settlement Time Line
Unless you use a settlement service, combined with a loan, it can still take a year to four and a half years to repay everything. It really depends on the amount of debt you have to restructure, how much the company can reduce the amount owed and the amount you can afford to repay each month.
Bankruptcy or Debt Settlement
The bankruptcy that simply wiped the slate clean, Chapter 7, is now exceedingly tough to obtain. You can still file for Chapter 13 which restructures your debt in a way similar to what a debt settlement company would do. When you pay the settlement percentage, the creditor considers it “Paid in Full,” but your credit report will show “bankruptcy” on your credit report. That word on your report can cause you employment denials, denials of insurance, rentals and other issues. You will owe on it until it is paid off and it usually features a high monthly payment. Debts such as alimony, child support and student loans do not qualify. Debt settlement makes a quicker positive impact on your credit and you’ll be able to move or change jobs easily.
Who should use debt settlement?
Debt settlement works best for people who are already behind on their payments. Creditors typically will only accept a settlement offer from someone who is behind on their payments. So, if you’re already making your payments, you really are not going to get approved for a restructuring. You can perhaps qualify for a consolidation loan though which could reduce your monthly payments.
Earning More Money
Although it may seem like a no brainer, if you increase your monthly income, you can put more money to your bills. This decreases your debt quicker. You can do this by asking for a raise at your existing job, getting a second job or by starting a freelance business to earn more income.
Ask for a raise
If you have been with your current employer for a while, ask for a raise. Do your research on the average pay for your position and how it typically increases over time. You may discover you are significantly underpaid for your area. If you perform well at your position, you can usually obtain a raise at you have been employed there for a substantial amount of time.
Get a second job
You could add another income stream by getting a second job or starting a freelance business. If you know you will keep the job, you can include the income in the information you provide to the debt settlement firm. On the other hand, get a part-time job and work at it for a few months before applying for the loan. Six months is a good length before applying for a loan. You will need about six months of paystubs to show a loan officer.
Even without a debt settlement, you can pay off your debt more quickly with a second income. The quicker you pay off debt, the more you improve your debt-to-loan ratio, so long as you do not close the account after repaying it.
Start freelancing by using a company like Freelancer or Upwork to find contract work as an appointment setter, personal assistant, blogger on a topic you know well, a Lyft or Uber driver or some other pursuit. You can also open an Ebay account, conducting drop shipping sales or selling items you already have. Another option is an Amazon reseller account. You can opt to use a drop shipping service or a fulfilled by Amazon option.
Restructure your own budget
Sometimes, you can simply restructure your own budget to save money. Cut out some of your entertainment budget or eating out. Make coffee at home rather than visiting the coffee shop. Make lunch and take it to work with you. Stop smoking. You can often find the equivalent of a monthly payment by doing this in enough optional items. You can also try finding a cheaper place to live or get a roommate so you split the rent and utilities. This can save you a huge amount each month and you will suddenly have much more income to devote to repaying your debts. That will stop debt collector calls and letters, too. Then once you feel you are in a good spot, start to build an emergency fund so you don’t end up back in the same position.
How Much Debt Settlement Can Save You
How much debt settlement or restructuring can save you varies according to the debt types, which creditors will settle and the amount owed. Creditors that often settle debt amounts have a set scale to reference. Typically, you’ll repay between 40 percent to 85 percent of the debt. Choose an experienced debt settlement firm since these can sometimes negotiate even smaller percentages.
If you want to avoid paying the fees for a restructuring firm, you can do so by handling the negotiations on your own. While you could wait for the creditors to offer you a deal, it is far better that you contact them to proactively settle the debt. This shows that you are concerned about the debt, willing to repay it and actively attempting to do so. This alone makes the creditor more willing to work with you because you are not trying to dodge your debt. You can begin paying things off though by starting with the creditors who have already sent you offers.
Here’s the deal
If you do it yourself, you probably won’t get the same amount of debt reduction as if you went to a settlement company. They can probably negotiate for an additional 20 percent off than you can alone. Not only are they experts, but creditors are accustomed to working with them. The firms also require you to use an automatic debit to pay them the lump sum each month that they then distribute to each of your creditors. This provides a sense of security to the creditors since they know that settlement company will make the payment on time every month.
It will also cost you time. You will need to gather all of your bills and credit reports and phone every single creditor. You take the notes. You negotiate the price. Suddenly, as the hours of financial conversation weigh on you, you still find yourself having the same conversations as you would have if you had not been able to stop the debt collector calls. It really is worth it to use a non-profit agency or settlement company.
Know the Debt Settlement Risks
There are other negatives besides the temporary damage to your credit score. You may not reduce your debt as much as you’d like. It is still less than you owe now though.
Some creditors do not negotiate. Some creditors may not work with the debt settlement company you choose.
While it won’t end your debt instantly, it will help you pay it off more quickly than if you had not negotiated it. Do not set an unrealistic goal of paying it all off in one year. A realistic goal is to pay it off in five years.
Your interest may continue to accrue. Not all creditors are willing to reduce the interest rate or pause it.
You will owe the debt settlement company the fee for negotiating for you and for managing your payments during repayment.
Using the steps in this article lets you stop debt collector calls permanently. You will easily be able to answer the phone again without dread. Start with Debtry to learn how to manage your debt and get it paid off quickly.