Editorial Policy

Know Your Rights When Dealing With Collectors

Erica Sandberg

February 23, 2012

QDear Erica,


I was out to dinner with a friend and was so embarrassed because my phone would not stop ringing. It was this bill collector. He’s been calling my cell for months and won’t stop. It’s always the same guy. I had an account with Wells Fargo and made payment arrangements with them so I could pay what I could afford. I guess they got sick of it, and now this collector is hounding me day and night seven days a week. Doesn’t the fact that I tried matter? I hate this guy so much. The collector has told me to borrow money from my friends so I could pay him. Can he say that? — Justine

AHi Justine,

Well, can you borrow money from a friend? He is allowed to ask, and if you’ve got a well-off and generous pal, it is an option. It’s actually really important to explore all reasonable methods of resolution.

Seems to me that you’re a little foggy on what your rights and responsibilities are regarding that debt. So here’s what you need to know.


As a consumer who has an account in a third-party collection agency, the Fair Debt Collection Practices Act protects you from abusive collection techniques. Among the provisions of the law:

  • The collector can call, but not harass. This means no excessive phone calls. More than one answered call per day is typically too many. Your collector may call you any day of the week (including  holidays) but not before 8 a.m. and after 9 p.m. — your time, not his.
  • No empty or violent threats are allowed. The collector may not swear at you, threaten harm or say that he will sue you unless he really will take the next step to do so. Notice that it doesn’t say anything about suggesting “creative” solutions to handling the debt, like asking loved ones for a loan.
    • Your debt is private. Though the collector can call other people and your place of employment in attempts to find you, he may not discuss your account with anyone but you and people you’ve authorized.

Ask Erica

  • You can stop the calls. If you really want silence, you can request that all correspondence be conducted by mail. Or, you may also send a cease-and-desist letter, which will end all communication. Upon receiving the letter, the collection agency can either inform you that it will proceed with legal action, or simply stop contacting you.


The list of your responsibilities is shorter, but no less important:

  • Understand and respect the contract. When you used the Well Fargo credit card, you promised to repay the amount you charged. You didn’t. Never forget that you signed a contract when you applied for the account. When you stopped paying, you broke it and there are consequences for doing so.
  • Deal with the debt to the best of your ability. Depending on your financial circumstances, your options may include:

1.  Sending the entire balance at once. How can you achieve this? Perhaps you can work very hard, cut spending to the bone and save enough to send every borrowed dime. That’ll stop the calls.

2.  Negotiating a debt settlement. Another possibility is to ask for a reduction in the amount owed. If the collection agency agrees, it will stop contacting you after you send the money. One downside to settling debt is that you may be issued a 1099-C miscellaneous income statement for the amount of debt that was forgiven, which is considered taxable income.

3.  Arranging for partial payments. Some collection agencies will consent to a short installment plan. In a letter, ask that the agency accept an arrangement in which you pay up in no longer than six months. So, if you owe $1,800, you might propose paying $360 a month until the balance is at zero five months later.

Don’t waste your energy hating the collector, Justine. Use it to find resolution instead. And turn your ringer to mute when you’re at dinner. It’s the least you can do, not just for your peace of mind but out of respect for your dining companion.