If you’ve gone over the edge, so to speak, with your debt and have had your bills turned over to a collection agency, the main thing to do is not talk to them unless you intend to pay them. There are several good reasons for taking this approach.
The strongest reason for not talking to them is because they have a lot of practice in manipulating and scaring people, and many of them are very good at it. When you’re drowning in debt and have ugly marks on your credit report, the last thing you need is some collection guy scaring you into believing things that are not true, or talking you into making commitments that you can’t or don’t want to make. Thus, the smartest thing you can do is not speak or listen to them at all.
Instead, get online, at home if you can, or at the library or any other place you can get access, and find out what the rules are for collection agencies in your state. Most states now bar collection agencies from calling before 8am for example or after 9pm. Also many states now have rules that say collection agencies cannot call you at all if you send them a letter asking them to desist.
Another reason to not talk to them is because every time you do you reset a little clock that keeps your file active. Collection agencies can only try to collect from you within seven years of dealing with you about it. You want that clock to start the second you miss your first payment and then to keep on ticking. If you talk to the collection agency, you’ll be resetting that clock over and over again each time you do it, thus delaying the time that your seven years will expire.
Remember, there is no law or rule that says you have to speak to collection agencies; nor are there any penalties for not doing so, thus, no bad things will happen to you if you ignore their phone calls, but some bad things might happen to you if you do talk to them, so, just don’t do it.
Also, be on the lookout for information from the collection agency that comes via the U.S. postal service. Most states have laws that say a collection agency has to notify you by mail if they file a claim against you in court. And then, if the collection agency does sue you, do not under any circumstances miss that court date, because if the collection agency is there, and you’re not, the judge will likely give the agency most of what it’s asking for, such as a freeze on your bank account, garnishment of wages etc. If you go to that hearing on the other hand, and bring every scrap of evidence you have of your inability to pay, or how having your wages garnished or bank account frozen would destroy your life, you are likely to get a much better deal at court.
Finally, consider filing for bankruptcy. If you are in so deep that it is clear that you are never going to be able to climb out of your mountain of debt, bone up on bankruptcy rules and regulations in your state, and then find out where the court is that you would have to do it in. Then, collect all of your documentation, including copies of your credit report, and petition the court. If you’re truly in over your head, you will almost certainly be allowed to declare bankruptcy, and that will force all of those collection agencies to leave you alone.
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