Learn about the Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act is a Federal Law that regulates how third party debt collectors must behave while collecting debts. For example, it regulates WHEN collectors can call, WHO collectors can call, how they are required to treat you while collecting debts. For more information on the FDCPA visit www.ftg.gov or www.debtcollectorshateus.com.
Understand What Threats are Most Likely False
Collection agencies cannot sue you; only law firms can bring legal action. If a collection agency tells you that they have been "retained" to file a law suit against you, that they are working with state or local authorities to collect the debt, that a sheriff will be out to serve you or anything of the sort, they are most likely lying. A collection agency is hired by a credit grantor to collect a debt that you owe the credit grantor. If the collection agency collects money, they get a certain percentage of the money as their fee. If they don't collect any money most likely they will be required to pass the debt back to the creditor grantor and will not get paid for their services. Rarely, if ever, will a collection agency retain a law firm to file a lawsuit
Get Everything in Writing
I've heard horror stories from clients that say they reached a payment arrangement or settlement arrangement with a collection agency and comply with its terms only to later find out the collection agency denies ever having made the deal. So, make sure you get any agreement between yourself and the Collection Agency in Writing!