How To Deal With Debt Collectors When You Can’t Pay

Last Updated: March 27, 2025

Protect Yourself while Working Towards a Debt Solution

How Do I End Up at Debt Collection?

After several missed payments, creditors may sell your debt to collection agencies. This significantly impacts your credit score. However, these agencies often buy debts at a discount, potentially allowing you to negotiate a lower payoff. To avoid dealing with debt collectors, try working with your original creditor on a payment plan before your account reaches this stage.

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Working with A Collection Agency or Debt Collector: A Guide

The federal Fair Debt Collection Practices Act (FDCPA) protects you from harassment by debt collectors. Your state may have additional protections - these usually deal with business debt and with original creditors. If your state has a FDCPA law it will be noted on the state page.

When you receive your first debt collector contact, it's important to know that you have 30 days to request verification of the debt. During this time, you can assess your options, especially if you can't pay the full amount they're requesting.

We list what actions a debt collector can not take in the next section. If you have a debt collector who violates this law, we'll give you some suggestions on how to document and report it. Many consumers become overwhelmed by frequent phone calls and letters from collection agencies.

What are Debt Collectors Allowed to Do?

The first and most important thing to know is that you have federally guaranteed rights and many states have similar rights. Here is what a debt collector cannot do under the Fair Debt Collection Practices Act (FDCPA):

• Contact you between 9 p.m. and 8 a.m. without your permission
• Threaten violence or using profanities when speaking to you
• Contact third parties (family, friends and employers) about your debt or otherwise embarrass you
• Speak to your employer except under limited conditions
• Pretend to be a government official or an attorney
• Send letters that look like attorney or governmental letters but that are not
• Send derogatory messages about you to a credit reporting agency
• Send information on a postcard or via social media
• Attempt to collect an expired debt
• Hire an unlicensed credit collection agency
• Communicate with you if you are represented by an attorney
  What Do I Say to Creditors If I Can't Pay?

If you can't pay debt collector demands, be upfront with them. They might be willing to negotiate a deal or potentially drop the debt. However, be cautious about your public presence. If you claim inability to pay but debt collectors later find social media posts suggesting otherwise, they'll likely resume their collection efforts. Honesty and consistency in your communications can help manage this situation more effectively.

What Should You Not Say to Debt Collectors?

This list includes things you should not do or say to a debt collector. 

• Make a good faith payment. This payment can restart the expiration clock
• Be rude to a collector. It can work against you if the phone calls are replayed in court
• Let your contact information get out-of-date (the debt collection agency can contact third parties to track you down)
• Admit that it is your debt or promise to pay – it can be construed as a contract
• Give out financial information like your social security number or the value of a property

What Should You Do 

While you are speaking with a debt collector, here are some things you should do:

• Take notes when you speak to a debt collector. Write down date and time, debt collector name, which debt, and what the debt collector says
• Keep all mail, copies of texts, etc. from each debt collector contact
• Tell the collector if you legitimately can’t pay. They may try to work with you
• Tell the collector if the debt is not correct
• Give them your current contact information

Consider telling the collector to stop contacting you. If you want to work towards a settlement, you may not want to take this step

What Steps Can You Take Once in Collections?

To handle debt collectors, you have several options:

1. Negotiate with debt collectors: Offer 40-50% of the total amount. Get all agreement details in writing, including the repayment amount, debt specifics, collection agency information, and impact on your credit report.
2. Set up monthly payments: Establish a manageable repayment plan with the collectors.
3. Debt consolidation: Take out a loan to pay off debts, though this may be challenging if you're already in collections.
4. Debt management: Work with a credit counseling agency to improve money management skills.
5. Debt settlement: Use a company to negotiate with creditors while you save for repayment, or attempt this yourself.
6. Bankruptcy: A last resort requiring legal advice and representation.

Ignoring debt collectors is not recommended as it may lead to legal action. Choose the option that best fits your financial situation and goals.

Take Action to Deal with Debt Collectors - Work With Pacific Debt, Inc.

Pacific Debt, Inc. offers expert assistance in managing debt collectors, starting with a free consultation. Our specialists provide a thorough analysis of your financial situation, explaining all available options clearly. We're committed to helping you become debt-free within 1-2 years, tailoring our approach to your specific needs. Our success is tied to your financial recovery - we only profit when our debt relief program works for you.

Take the first step towards financial freedom by contacting Pacific Debt for your no-obligation consultation today. With everything to gain and nothing to lose, start your journey to a debt-free life.

For more information, talk with one of our debt specialists today.

Conclusion

Facing debt collectors can be intimidating, but don't worry - you've got this! Our straightforward guide provides you with practical tips to navigate these challenges. Remember these key points when dealing with debt collectors: stay organized, know your rights, and communicate clearly. You're not alone in this journey. Help is available if you need it. By taking a methodical approach, you can manage debt-collector interactions with less stress and steadily work towards improved financial health. With the right tools and mindset, you can turn this situation around and pave the way for a brighter financial future.

*Disclaimer: Pacific Debt Relief explicitly states that it is not a credit repair organization, and its program does not aim to improve individuals' credit scores. The information provided here is intended solely for educational purposes, aiding consumers in making informed decisions regarding credit and debt matters. The content does not constitute legal or financial advice. Pacific Debt Relief strongly advises individuals to seek the counsel of qualified professionals before undertaking any legal or financial actions.

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