How to Deal with Debt Collectors When You Can’t Pay

If you’ve fallen behind on your bills and are dealing with debt, don’t be surprised if you start hearing from debt collectors. Those collectors have a job—to get as much money out of you as they can. So, they’re probably not going share things that might make it easier for you to fight back or get out of paying.

But don’t worry—you don’t have to do this on your own. If you’re wondering how to deal with debt collectors when you can’t pay, you’ve come to the right place. We’ve got a few tips and tricks debt collectors would never share.

1. First, Know That Debt Collectors Aren’t Quite as Fearsome as They Pretend

Debt collectors are trained to use scary and forceful language to coerce someone into making an immediate payment. If you arrange to pay the first time they talk to you, it’s less likely you’ll ask for verification of the debt or take other action that might slow down the collection effort.

Here’s an example of one of their tactics: collectors might threaten to mark you as “refusal to pay” in their files. They might say this if you say you can’t pay the bill—even if you would like to.

It might sound bad, but it’s actually meaningless. You’re alreadynot paying the bill. That’s why a collection agency is contacting you. Marking your refusal to pay doesn’t actually change the situation or make it worse for you.

2. Settlements Are Rarely a One-Time Deal

Collection agents want to get your money while they’re on the phone with you. They might actually get a bonus for doing so. When an individual collection agent says that a settlement offer is a one-time deal or won’t be available after a certain amount of time, that’s usually not the case.

The older a debt is, the less likely someone is to collect it. Which means older debts might even be easier to negotiate.

That doesn’t mean you should avoid paying if you can just bring the total down. That could lead to dealing with lawsuits and other issues. But it does mean you don’t have to jump just because the collector says to.

3. You Can Demand That Collectors Stop Calling You at Work

Do you have collectors calling you at your job? You can tell them to stop. The Fair Debt Collection Practices Act makes it veryclear. Once you tell a debt collector your employer doesn’t allow you to talk with them while you’re at work, they must stop calling you there.

4. Your Debt May Be Too Old to Collect

Your debt might be past the statute of limitations. However, a debt collector either might not know that or not want you to know that. It’s up to you to be aware of your own debts and double check how old they are.

If you discover that your debt is beyond the statute of limitations for the state where you borrowed it, then you know the collector cannot successfully sue you. But you do have to be careful not to accidentally reset the clock on your debt.

In most states, the statute of limitations runs three to 10 years from the date you last made a payment. If you make a payment because you feel pressured by a collector, you reset the clock. The collector might have another decade for collection.

It’s also important to realize that a collector can continue to try to collect the debt from you without suing you. Old debt might also still be dragging down your credit score.

5. Debt Collectors Are Under Pressure to Collect

Collectors have to meet performance requirements at their jobs like everybody else. This means they might need to collect a certain amount each month or close a certain number of accounts every quarter.

That means you might have better bargaining power at the end of the month. For example, if you owe $3,000 and can only pay $1,000, the collector probably won’t be okay with taking that lesser amount. But if you reach out at the end of the month, and the collector needs $900 for their monthly quota, they might be more willing to settle on your $1,000 payment.

In the meantime, by not paying immediately, you buy time to request verification of a debt. You might even have time to come up with more money to be able to cover the debt.

6. If They Really Want to Play Hardball, They Will Have to Sue You

If you owe unsecured debt such as credit card debt, collectors must typically sue you before they can go after your property, including money in your bank accounts, or try to garnish your wages. But threatening to take such actions before they have sued you and won a judgment may be illegal. Even threatening to sue you to collect a debt may be illegal if the collector has no intention of doing so.

Keep a notebook and write down each time a debt collector contacts you and what they say. You may be able to report them to the Consumer Financial Protect Bureau if they aren’t following the Fair Debt Collection Practices Act.

7. Paying Off This Debt Won’t Help Your Credit Ratings

Under the Fair Credit Reporting Act, a collection account will remain on your credit reports for seven years from the date you fell behind with the original creditor. Collectors may make it sound like paying off collections accounts will improve your credit by telling you that they will update your credit report to “paid in full” status. But this probably won’t help your credit score. Collection accounts are negative, regardless of whether they are paid or not, though some newer credit scoring models do not factor in paid collections.

On the other hand, paying the collection account may stop the creditor or collector from suing you. That lets you avoid a judgment on your credit report that could hurt your credit score even more. Additionally, some mortgage lenders may require you to pay or settle collection accounts before giving you a loan.

Working Toward Better Credit

Whether you’re being hounded by collectors for debt that isn’t even yours or you’re ready to take a stand and take back control of your credit, credit repair is an option. You can manage the process on your own or work with a professional service such as Lexington Law or These firms help you remove inaccurate information from your reports and provide some guidance on how to improve your credit score over time.

Disclosure: and are both owned by the same company, Progrexion Holdings Inc. John C Heath, Attorney at Law, PC, d/b/a Lexington Law Firm is an independent law firm that uses Progrexion as a provider of business and administrative services.

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