Protection From Debt Collectors

WASHINGTON, DC (WUSA) -- A tough economy, a slashed salary, leads to less money coming in to pay bills.

And, whether you pay on time or not, the law protects you from being harassed by collection agencies.

Jane Bennett Clark with Kiplinger's Personal Finance shares six tips you need to know to protect you from abusive debt collectors.

Get the facts. Jane says in the collection agency's first letter they must provide you with the name of the creditor, the amount of the initial debt, a breakdown of penalties and interest, and an explanation of your rights.

Set the record straight. If you don't recognize the debt, or know you're being dunned in error, write a letter disputing the claim to both the collection agency and the creditor. Also, Jane says, include details, dates and copies of any supporting paperwork. Send the letters by certified mail, with a request for a receipt, within 30 days of the first written notice.

Hang up on harassment. Collection agencies are prohibited from calling you between 9:00 p.m. and 8:00 a.m. and from using abusively or threatening language. If you don't want to be called or contacted at all, write to the agency and say so.

Agree on a plan. Work with the agency to come up with a realistic plan for paying it back. Debt collectors would rather adjust the terms of repayment than face future defaults.

Tell the authorities. Complain to the Federal Trade Commission which enforces the Fair Debt Collection Practices Act. You can also contact your state attorney general's office. They may be willing to pursue your case.

Sue the bums. You can sue a collection agency that flouts the federal law and collect statutory damages of up to $1,000, plus real damages and attorney fees. Jane Bennett Clark says many lawyers will take your case on a contingency basis or charge a fee of $25 to $100.