How To Deal With Debt Collectors When You Can’t Pay


The creation of debt is usually caused by avoidable misunderstandings on the part of the borrower and lender. For example, the borrower assumes they can repay the debt. The lender assumes the borrower will do so. Culpability must always be kept in mind as you learn how to deal with debt collectors.

The average person owes over $90,500 to their creditors. (Wouldn’t it be nice to own that money instead of owe it?)

No one deserves to be harassed or threatened by a debt collector.

Under the Fair Debt Collection Practices Act, there are restrictions concerning how a debt collector can contact you.

However, a debt collector is ultimately empowered by financially irresponsible and delinquent borrowers who stop paying their bills.

I am not judging you, or anyone else. I’ve been harassed by debt collectors too.

And, I’m not alone.

Over 70 million Americans were contacted by debt collectors in 2017. Debt collectors employ aggressive tactics over a billion times annually to contact delinquent debtors.

Amazingly, only 81,500 people filed complaints against aggressive and threatening debt collectors in 2018.

Unless you’re being hounded for debts unrelated to you, you have culpability if a debt collector contacts you.

That still doesn’t mean you should put up with crap.

There are many things you can do if you want to learn how to deal with debt collectors if you can’t pay.

Let’s start with the basics first.

Debt Collection 101

The best way to learn how to deal with debt collectors is know who they are and understand how they operate.

This problem starts when you neglect to pay debts like:

  • Cell phone bills
  • Utility bills
  • Credit card bills
  • Mortgage
  • Personal loan
  • Student loan
  • Medical bills
  • Car loan
  • Business loan

If you fall into bill payment delinquency by 60 or 90-days, your creditor could take drastic measures to collect that debt.

Your creditor could sell your debt to a third-party debt collector.

It’s more cost-efficient for your creditor to sell your debt to a third-party debt collector than burn additional resources to collect the debt. Your creditor might pay 25% to 50% of what you owe to a debt collector if they can collect your debt.

A debt collector is essentially a bureaucratic bounty hunter of debt.

They buy your unpaid, past-due debts from your creditor to collect a commission upon acquiring that debt.

An individual, agency, or lawyer can act as debt collectors.

How to Deal With Debt Collectors: What They Can and Can’t Do

Debt collection practices are protected under the Fair Debt Collection Practices Act, a federal law, to collect your delinquent debts.

Still, debt-collectors are not all-powerful. There are limits to their debt collection practices.

Let’s touch on what they can, and can’t do, do to collect your debts.

Depending on your local laws, a debt collector can send you text messages, call you, or call your employer. (They shouldn’t able to visit your place of employment.).

Debt collectors can notify credit bureaus about your delinquency and get your credit score lowered. (That would happen automatically after payment delinquency anyway).

Debt collectors might call your family, friends, and people you know to ambiguously inquire about contacting you.

Your creditor will provide debt collectors with your personal information so they can hound you. You have a legal right to formally write a debt collector and ask them to stop harassing you.

A debt collector can sue you to collect a debt.

Unless you owe significant sums of taxes or haven’t paid child support, you can’t be jailed by the actions of a debt collector.

Even then, you would have to be held in contempt of court after a debt collector sues you for you to be jailed.

Debt collectors cannot constantly harangue you, call and text you incessantly, use obscene language against you, or threaten you with violence.

They also can’t contact you between 8AM and 9PM. (This is a rule they don’t usually follow).

Federal and local laws may differ on debt collection tactics. You may want to consult a local nonprofit consumer advocacy agency, state government website, or financial advisor for more information.

Now that you have the basics on how to deal with debt collectors, here’s what to do if you can’t pay.

Tips on How to Deal With Debt Collectors When You Can’t Pay

Don’t pay anything just because a debt collector contacts you.

After a certain time, you may be legally protected from being contacted by a debt collector, but not necessarily the consequences of not repaying the debt.

There are statute of limitations regarding debt collections. They can range between 3 to 10 years depending on your state of residency.

Creditors hire debt collectors when such statutes begin or are close to running out.

If you pay a dollar when a debt collector contacts you, then the statute of limitations on your debt collection account automatically restarts.

Write a letter asking the debt collector to stop contacting you. Even then, they may contact you indirectly or less annoyingly.

If the debt collector viciously or incessantly harasses you, threatens you with violence, or uses dirty tactics to contact you, file official complaints.

You can file complaints with:

Make sure the debt collector is contacting you for debt that specifically belongs to you.

There are many affordable lawyers who will hear such a complaint during a free or low-cost consultation.

You can contact your lender directly and try to negotiate new repayment terms.

Although, that should have been the first thing you did when you realized you couldn’t pay your bills.

A debt collector has no right to harass or hound you.

However, financial irresponsibility and delinquency in repaying debts is what empowers debt collectors in the first place.

Pay your debts on time and in full.

Consult a financial adviser or lawyer and be informed of your rights.

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