The first thing I will tell people is to take a breath and try not to act out of fear. The vast majority of financial woes resolve without rash decisions like borrowing from your 401k or taking out a home equity loan. This article will go over some tips and tricks to help you get through an emergency. 

Know your rights against debt collectors

The first thing to know is who you are dealing with when a collector calls. Are you dealing with the actual company you originally owed the money to or a company that bought that debt from a company that gave up trying to get the money owed? We will get into how to handle both in a bit, but first, you must know about the Federal Fair Debt Collection Act of 1977. That law states that:

1. They can’t threaten that they will garnish your wages without a court order. Garnishment takes time, and you would have received notification that they are pursuing legal action against you to top all of this they also have to win in court. 

2. Collectors are obligated to provide you with proof that you owe the debt they are claiming that you owe. When asked, they are required to send this proof within 5 days. 

3. They are not allowed to harass or threaten you. It seems silly to point out that it is not permitted to threaten harm to anyone, but sadly it is not unheard of behavior. When talking to you, it is not allowed for them to swear at you, and can’t call others and say that they are seeking help to collect payment on a debt. They are only allowed to ask someone for an updated address or phone number. They are not allowed to publish a list of people that owe money, and lastly, they are not allowed to call you off the hook.  

The best advice I can give is to be upfront and tell them how often you will speak to them, tell them that you will hang up if they call more often, that is ok to do, and oddly better than not answering their call at all. They are not permitted to call outside of the hours of 8 am and 9 pm. If they try to call you at work, all you need to say is that your work does not permit you to receive personal calls at work, and they are required to stop calling you there.

4. Despite common practice, they are not allowed to lie to you and request you pay more than you originally owed and are not allowed to ask you to pay a debt that is outside of the statute of limitations either. Be smart do a little digging to see if an old debt is out of date. Lastly, they are not allowed to impersonate police, lawyers, or from a credit-reporting agency. 

An important fact to remember if you can pay the bill soon and write a post-dated check, they are not allowed to cash that check early. 

Ok, now that we have talked about debt collectors, let’s talk about the big fish.

In any emergency, my second piece of advice is your best weapon against any crisis is a plan. The plan has two parts that feed into the system: income and expenses. 

Let’s say you do not have any income because you lost your job. Your next plan of attack is to stop any bleeding to your income. The easiest way to do this is to go back to those pesky statements most people do not take the time to look over. You need to figure out everything that can come out of your account. Take any subscriptions and stop them immediately. An excellent place to start this is by logging into the typical sites, Apple (thank you Apple for making it is a snap to find all subscriptions and stop them asap), Paypal, and Amazon. Another easy step to prevent unwanted transactions is to call your bank to tell them you lost your card and ask them to stop all charges to the card and to supply a new one. Don’t worry, it will be easy to sort out the ones you need to pay when they contact you. 

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