MoneyWise Live | March 7, 2019

How to Deal with Debt Collectors

Show Notes

If it’s ever happened to you, you know how demoralizing it can be. Getting a call from an aggressive debt collector can make you want to crawl into a hole. You might feel intimidated— even if you don’t owe the debt!  But debt collectors have to follow certain rules. They can’t harass you. So it’s important to know your rights. Financial planner and teacher Rob West tells us how to deal with abusive debt collectors. 

We're not saying that all debt collectors are bad guys.  The vast majority of cases the debts they’re attempting to collect are legitimately owed and they have a legal right to try to collect them.  But if you're being harassed by a debt collector, here are some topics Rob what you need to know if you're being harassed by a bill collector:

  • Make sure you’re the right person and that you actually owe the debt.
  • If it’s a legitimate debt— you still have rights under the Fair Debt Collection Practices Act— which is enforced by the Federal Trade Commission.
  • Debt collectors can’t call you at all hours of the day or night. They’re restricted to between 8 am and 9 pm unless you give them permission to contact you outside those times.
  • You have the right to tell the collector verbally or in writing that you’re not allowed to take their calls at work and they should immediately stop trying to contact you there. If they keep doing it— you can report them.
  • A debt collector is not allowed to contact a third party about you for anything other than to get your contact information. They are expressly prohibited from telling anyone that you owe money.
  • Debt collectors aren’t allowed to lie, mislead, or use any kind of deceptive method to collect a debt from you. Specifically— here’s what they can’t do:
    • They can’t lie about the amount you owe.
    • They can’t falsely claim to be law enforcement officers.
    • They can’t claim you’ll be arrested if you don’t pay your debt.
    • They can’t threaten to seize, attach, or sell your property or garnish your wages unless they actually intend to do it.
    • They can’t give false credit information about you to anyone, including a credit reporting company.
    • They can’t use a fake company name to collect a debt.
  • Finally, Rob discusses how you report a debt collector who does any of these things.

Next, Rob and Steve answer these questions at 800-525-7000 or via email at

  • If you're employer is moving your funds in your 401(k) into target date investments, should you redirect the investments?
  • If a friend of yours has $50,000 debt, is 5 years away from retirement age and is contemplating filing bankruptcy, how should you help her?
  • If your husband passed away recently and you've been receiving calls questioning your connection to an estate, how do you know if these are bona fide calls?
  • If you have Asperger's syndrome and are happy with your current job in Illinois but have heard that the state will begin minimum wage increases, should you start looking for jobs in another state?
  • Does it affect your credit report if your creditors update their information on a monthly basis?
  • If you have a credit rating in the high 700s, have $80,000 of credit card debt and are living paycheck to paycheck, should you consider refinancing your home mortgage to pay the credit card debt?    

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