Dealing with Phone Calls from Debt Creditors Looking for Your Payment

Anyone who has ever made a single late payment has most likely felt the sting of a creditor calling to find out when they can expect to receive their payment. Anyone who has been in this position knows it can be incredibly stressful. Whether you've missed one payment or several, you have some rights you should know about.

First of all, there are very specific times of the day when creditors are allowed to call you. Generally speaking, they are legally allowed to call you between 8 AM and 9 PM. But just because they call, doesn't mean you have to speak to them. When they call, simply tell them that you cannot receive personal phone calls at this number and request that any information be sent to you via mail. Sometimes, you may have to take it a step further and send them a registered letter stating that they are not to call you. If you've sent them this letter and they continue to harass you with phone calls, you should report them to the Federal Trade Commission.

As much as we'd all like to be able to walk away from our debt, especially when we're being hounded by creditors, we cannot simply walk away from it. It is in your best interest to work out a payment arrangement that you can live with. Why? Well, for starters, if you don't, in many states, the creditor is allowed to file legal action against you to freeze your banking accounts and/or to garnish your wages. In New York state, only one creditor is allowed to garnish your wages, but they are allowed to take up to 10% of your gross income. The best tactic to use when negotiating with your creditors is to let them tell you how much of a payment they would like to receive, then use that as your bargaining point. In negotiations, the first person to give a number is usually the one who loses. Barter the amount down to something reasonable that you can live with, but keep in mind that the lower the payment, the longer the interest on the account will compound.

If you have several accounts that are spiraling out of control, consider a debt management program. Oftentimes, the creditors will not directly negotiate your interest fees, however, if you involve a debt management program, they will usually lower the interest and waive late fees. The downside to this is that utilizing a program such as this can also lower your credit score. Be sure to check with the Federal Trade Commission and The Better Business Bureau to be sure that you sign with a professional organization. Also be sure to ask the credit counselor questions specifically about how much money you'll save, how low your interest rates will be and the impact to your credit score before signing any agreements with them.

Once you have managed to get the creditors to stop calling you (whether by deferring to written communication or by enrolling in a debt management program to get your payments made promptly), you need to take a step back and evaluate what got you into this financial mess in the first place. This introspective is often the most difficult thing to do, but it must be done. If you cannot determine why you were overspending, you will continue to do so. Is shopping a form of therapy? Can you genuinely not afford all of your bills? Are you spending too much on entertainment or other non-necessities? The best technique is to track your spending for at least two weeks. I use a regular piece of notebook paper and make the following columns: Date, Item, Amount, Necessary/Non-Necessary. By making yourself think about whether a purchase is an absolute necessity or not will help you make better decisions in the future. But be honest with yourself, not everything you're going to list will be a necessity either, and that is okay, as long as you're not using a disproportionate amount of your income on the non-essential items.

After you've made your list you'll have a better idea of where your money is going and you'll be able to make adjustments as to where it should go. Look for creative solutions in your area to help you stretch your money each month. Food co-ops can often save you money on your groceries. Perhaps you can carpool or take public transportation. Being thrifty and making the sacrifices to get out of debt will pay off in the long run, especially if it means that you won't have to worry about who is on the other end of the phone when it rings.