Dealing with debt collectors rarely is a pleasant
activity. They call you up at all hours of the night, send you nasty
letters and make your life a living nightmare. Bad as it may seem,
you can only make it worse by making one or more of these mistakes:
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1. Lying: If
you lie and you're caught in a lie, you will most likely be sued. Also, Santa
may not bring you all the presents you wanted. So be good!
2. Settling without receiving
a confirmation letter: If you pay the debt, make sure you
get confirmation that the account is closed. Also, check your credit
report two months later to see that the line on your credit report
shows "closed" or "settled" or "paid as
agreed."
3.
Failing to dispute a charge in a timely matter: If you believe you have
been wronged, you must file the proper claim as soon as possible. The statute
of limitations is very specific depending on your state; if you wait too long,
you could lose your legal right to dispute the claim.
4.
Selling property: Do not sell the property you bought with the creditor's
money when you still owe money. The creditor will have a much stronger case against
you because frequently, equity can be protected better than cash.
5.
Ignoring the situation: If the collection agency has a legitimate claim
against you, especially if it knows you have a job, things can only get worse,
not better. Talk to an attorney and start investigating your options.
6.
Bouncing checks: This will get your case sent immediately to the creditor's
legal department and you will be sued rather quickly.
7. Becoming intimidated:
In the words of Eleanor Roosevelt, "No one can make you feel
inferior without your consent." Don't let the collection person
bully you around. You are human and deserve to be treated with respect.
8. Letting the creditor or collector deduct money directly from
your bank account: Never give the creditor
your checking account number. I had a client allow two creditors
to deduct payments directly from her checking account. She got paid
on a Tuesday, both creditors hit her account on Wednesday, and she
only had $1 left for the next two weeks!
9. Making promises you cannot keep:
Sometimes you will be tempted to just say, "The check is in
the mail." But when the check doesn't arrive, they'll call
even more frequently. They may even try to sue you for lying.
10. Avoiding the calls:
They will only occur more frequently. Keep the advantage, answer
your calls, and execute your plan. I discuss this in depth in other
columns.
Justin Harelik is a practicing bankruptcy lawyer in the Los
Angeles office of Price Law Group. To ask a question of the Bankruptcy
Adviser go to the "Ask the
Experts" page, and select "bankruptcy" as the
topic.
Bankrate experts' advice
Repeating your money errors of the past
is a sure way to personal finance wreck and ruin.
Here, Bankrate columnists identify their picks
as the worst mistakes you can make when it comes to your finances in the areas
of real estate, debt, taxes, bankruptcy and personal finance, along with tips
on how to avoid them next year.
