You're sitting at home, minding your business, when all of a sudden your phone rings. You don't recognize the number, but you answer it anyway. It's a debt collector and they want to talk about a bill that you owe.
This may be a high-stress situation that kicks your nerves into overdrive, but it's no time to panic. Instead, take these steps:
- Take notes: Before you do anything, grab a pen and paper so you can take notes during your call. In addition to writing down the debt collector's name, ask for information regarding the debt itself, such as how much you owe and how many days it's past due.
- Don't admit to anything: Even if you think you owe the debt, don't admit it to the collector. Doing this may lead you to make a payment or agree to an arrangement before you truly understand the ins and outs of your debt.
- Don't share personal or financial information: For example, the debt collector may ask how much money you earn, how many other debts you have and if you pay them on time. This is none of their business. You are under no legal obligation to share this information with a debt collector.
- Hang up: You don't have to stay on the phone with a debt collector. If they're becoming aggressive or won't listen to your requests, simply hang up and reassess your situation.
- Decide on the next steps: Once you get off the phone, review the information you collected to determine if you owe the debt. If you do, formulate a plan, such as making a payment arrangement or attempting to settle the debt with the original creditor.
As you gather more information and review your finances, you may find that you can expect more calls from debt collectors in the future. If you've tried everything to catch up on your debts but continue to fall short, bankruptcy may be an idea to consider.
Not only does a bankruptcy filing stop debt collectors from contacting you, which reduces your anxiety and stress, but it can also help you discharge some or all of your debts.
As you learn more about the pros and cons of bankruptcy, you'll find it easier to decide if it's the best way to protect your legal rights and improve your finances.