There’s no denying that debt can cause a great deal of stress, especially when it’s paired with the coronavirus pandemic. To make matters worse, debt collectors may still call you, even in the midst of this crisis. The good news is there are some things you can do to manage your debt and debt collector calls during these difficult times. The tips we’ve listed below can put you more at ease and help educate you on your rights.
Speak to them at least once
When a debt collector calls you for the first time, it can be a good idea to speak to them. This holds true even if you don’t believe you owe them any money or don’t have the funds to pay. A brief conversation can give you the chance to determine whether it’s even your debt, or if there has been a mistake. If it’s a debt you do owe, you will then have enough information to come up with a payment plan or figure out next steps.
Get to know the current debt collection rules
While debt collectors may contact you during the coronavirus era, there are still federal and state rules they must follow, including:
- You’re not responsible for your monthly payments on federal student loans from March 13th through September 30th, 2020. The Department of Education has also put a halt on interest during this time period.
- If a debt collector or creditor has sued you, they may place a wage garnishment order against you which allows them to use a portion of your income to resolve a debt.
- If you live in Washington, Illinois, or Oregon, there may be rules in place that make it illegal for a debt collector to seize your stimulus payment and put it toward your debt.
Consumer advocates are currently trying to stop all debt collection efforts. They believe that debt collection activity should be suspended and collection lawsuits should be postponed. In addition, they are strongly against new wage garnishment orders during this time. Keep an eye on these changes in the rules governing debt collection that may provide you with some extra protections.
Don’t be afraid to stop debt collector calls
If you’re overwhelmed with debt collection calls, understand that you can stop them. The Fair Debt Collection Practices Act (FDCPA) allows you to do so through a cease and desist letter. A cease and desist letter is simply a letter you send to the debt collector with a request to suspend all contact with you. Although it won’t get rid of your debt, it could give you some relief from calls and letters and give you the chance to focus on how you’ll repay it.
In your letter, include the following information:
- Current date
- Name and address of the debt collector
- Account number you get from your credit report or letters from the collector
- A simple sentence such as “I am requesting that you cease all communication with me.”
It’s a good idea to send your letter through certified mail so you can make sure the debt collector receives it. Also, keep a copy for your records. Remember that the cease and desist letter only applies to the debt collector you send it to, so if you’d like to stop calls from multiple debt collectors, you’ll need to send multiple letters.
Come up with a game plan
Since you will have to pay back your debt eventually, take the time to figure out what you’ll have to do to make that happen. These tips can help you out.
- Adjust your budget: Now is the perfect time to make changes to your budget. You may have to cut unnecessary expenses like takeout or cable so that you have more money to save and pay off debt.
- Contact creditors: If you know you won’t be able to make your payments because of COVID-19, reach out to your creditors and let them know. They may offer deferments or other options for borrowers who are facing financial hardship.
- Make extra money: Get creative and think about how you can earn some cash, especially if you’re out of a job or working less hours. You can sell items on Craigslist, deliver groceries, teach English online, or offer freelance writing or design services.
Remember the pandemic is temporary
Fortunately, the economic consequences of coronavirus won’t last forever. Jobs will return and the economy will improve in time, so stay positive and do whatever you have to do to get through this financial roadblock. But for now, if you’re struggling with debt collector calls or are worried about falling behind on debt payments, it might be time to take more serious action. Freedom Debt Relief is here to help you understand your options for dealing with your debt, including our debt settlement program. Our Certified Debt Consultants can help you find a solution that will put you on the path to a better financial future. Find out if you qualify right now.
- How to Prepare for a Recession If You are Already Struggling (Freedom Debt Relief)
- 3 Smart Ways to Spend Your Stimulus Check (Freedom Debt Relief)
- How to Avoid Coronavirus Financial Scams (Freedom Debt Relief)
- COVID-19 & Consumer Protections (National Consumer Law Center)