The global economy has been in the doldrums for some time, so it’s quite likely that people you know or perhaps even yourself may be dealing with debt collectors this year. There is nothing to be ashamed of, as once in a while many of us get into financial difficulty and may fall behind on personal loans, student loans, credit card bills and even medical and legal bills.

However, one common mistake that people make is ignoring debt collectors’ communication by mail and phone. That’s a bad idea. Debt collectors can be relentless in their pursuit of debt, and it’s easy to get intimidated in these situations. However, there are effective strategies for dealing with debt collectors. Even if you are unable to pay, you should still respond to these communications. Ignoring them will only make matters worse.

Who are Debt Collectors?

Debt Collectors act as agents for creditors. They collect debts and may even have the authority to commence legal proceedings. When they contact you, they may indicate possible courses of action they could undertake to recover the debt, such as court action. Stating that possibility is not considered harassment.

Debt collectors are not easy to deal with most of the time. The only way they can remain in business is by successfully recovering the money that they have been contracted to collect, and they’ll use all sorts of scare tactics to get their message across. These agencies are well aware that most consumers do not fully understand their rights, and most of them will deliberately feed you with a liberal diet of half truths and myth, in an effort to scare you into making payments for more than you can afford.

Experts offer the following tips for dealing with debt collection:

Educate yourself about your rights.

Educate yourself about debt and debt collection so that you know the rules and regulations by which debt collectors must operate. Debt collection is a highly regulated practice, and if your collector is breaking rules in order to collect a debt from you, it may well qualify as harassment.

Verify that the debt is yours

Unless you are absolutely positive that the debt is yours, you should definitely ask the debt collector for verification.  If you live in the UK, under the Consumer Credit Act you’re entitled to ask for full documentary evidence of the debt, including the signed copy of the original credit agreement provided you enclose a fee of £1. If this is not provided within 12 working days, the debt could become unenforceable.

If you live in the US, the collection agency must verify the debt within five days after it initially contacts you. If the debt is being collected by someone other than the original company, you will also want to verify that the company contacting you has the right to collect on it, even if you know you owe the original debt. If they don’t, then they can no longer attempt to collect on that debt or report it to the credit report agencies.

Once you are sure that the debt in question is indeed yours, that the agency has the right to collect it and that the amount is accurate, you should usually try to negotiate a deal with the debt collector.

Check that the debt is still within the statute of limitations

Depending on where you live, there’s most likely a statute of limitations beyond which a debt is uncollectible. A quick search for “statute of limitations debt collection” and the name of your current location will tell you how long a debt collector has to collect on a debt that you owe.

Get any negotiated agreement in writing.

Any agreements for making debt collection payments should be confirmed in writing and signed by a representative of the debt collector before sending in any payments.

Prioritize your bills.
No matter what a debt collector says, an unpaid credit card bill is not the most important bill you have to pay this month. Providing necessities for your family comes first.

Keep private information private.
Don’t give a debt collector personal information such as where you work, where you bank or your account number. In fact, you’re better off sending a money order than a check

Wipe your credit clean.
Ask a debt collector to remove any negative information they’ve placed on your credit report. At the very least, insist that your account be listed as paid in full rather than paid in settlement. Once they agree, get it in writing.

Don’t be rushed.
A debt collector will push and push for you to send them money immediately. Don’t do anything until you have confirmation of a payment agreement in writing.

Negotiate at the end of the month.
Because commissions for debt collectors are based on what they do each month, you may want to try negotiating near the end of the month. You could land a really good deal.

Take notes.
File all collection letters and keep detailed notes of collection calls. Note the day and time of each call, the name of the collection agency, the first and last name of the caller and what was said.

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