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What Is Debt Consolidation and How to Protect Your Rights When the Debt Collector Calls?

With most Americans spending sleepless nights trying to pay even the minimum due amounts on their credit cards; it is not unnatural that debt management and relief are high on the agenda of many. Terms like debt consolidation, debt settlement, and bankruptcy are rife but often little understood or misunderstood as stressed Americans try to avoid harassment by debt collection agents. A brief look in what debt consolidation entails and how you can legally avoid being harassed by debt collectors chasing delinquent credit card accounts.

What Is Debt Consolidation and How Does It Work?

When you have maxed out your credit cards and are finding it difficult to stretch your monthly cash flows to make the payment of the minimum dues possible, you can consider taking on a debt consolidation loan. Simply put debt consolidation is the process of adding up your retail debts, typically credit card dues so as to arrive at the total. These loans are available from a number of sources, typically banks and credit unions, else one of the many private lenders that specialize in this type of lending. The purpose of getting the debt consolidation loan is to use the proceeds to pay back in full all the credit card dues.

Pros of Debt Consolidation

By consolidating the debts, you are left with only one debt and one monthly payment. Also, debt consolidation loans are typically available at far more reasonable rates of interest compared to credit cards. Over the repayment period, it can result in a lot of saving on the interest expense. Another benefit of debt consolidation is that you can negotiate a longer term so that the monthly amount is more affordable and does not stress you out. Finally, even though your credit score takes a hit when you take out the debt consolidation loan, it improves over time as your credit utilization ratio is zero and you make the loan repayments on time. Read up debt consolidation reviews online to know more about how to consolidate your debts.

Disadvantages of Debt Consolidation

Unless your credit score is good, you will either be denied the loan or the interest rate will be so high that there will not be any savings over the credit cards. Further, debt consolidation only makes sense if the amount of debt is within your capacity to repay over three to five years. However, if the debt is so large that repaying it fully in inconceivable, it would be wiser to consider debt settlement or even bankruptcy, if suggested by your lawyer.

How Can You Protect Your Rights When Credit Card Account Turns Delinquent?

According to a new study by quoted by, 29% of American households have credit card debt more than their emergency savings confirming what most experts already know; the financial health of American households is pretty precarious. In 2019, Americans are likely to pay $122 billion in interest and fees; the sharp rise from the current level of $110 billion indicating the rising problem of cardholders in managing their dues. When credit card accounts or for that matter even debt consolidation loan accounts turn delinquent because of the inability of the borrower to repay as per the terms of the contract, they are usually turned over to debt collectors for realization. Even though the debt collector is well within his rights to demand the due payment from you, the Fair Debt Collection Practices Act (FDCPA) has been enacted to prevent debt collectors from harassing customers by engaging in deceptive, abusive or unfair trade practices.

How Can Debt Collectors Contact Me?

Debt collectors may contact customers regarding retail loans only; e.g. credit card dues, auto loans, student loans, mortgage, medical bills, etc. Business debts are not included in their portfolio. What most people do not know that debt collectors cannot contact you anytime they like, for example, no contact can be had before 8 a.m. or after 9 p.m. or at work unless you specifically agree to it.

What Is the Specific Way of Stopping Debt Collector Contact?

The best way is to send a letter asking them debt collectors to stop contacting you by certified mail with a return receipt to prove that they have received it. After getting this notice, the debt collector can only call to confirm receipt of the notice or to inform you of any specific action that they have initiated. If the collector has been informed that an attorney represents you, and then the communication should be to the attorney unless your attorney fails to respond within a period that is reasonable. However, it is a good idea to interact with the debt collector at least once to confirm that the debt is really yours and not someone else’s.

Can A Debt Collector Contact Others Regarding My Debt?

Contact by debt collectors regarding debt recovery of any person is limited to inquiring about the address, workplace, and phone number and that too only once. Collection agents cannot discuss any details of the debt with anyone else apart from the debtor’s spouse. If the debtor has an attorney about whom the collection agency has been informed, collectors can only contact him.

What Can the Debt Collector Do?

After the debt collector has contacted you, he is required to send a validation notice in writing within five days. The notice should specify the sum owed, the name of the creditor, and what to do if the debt is not yours. Debt collectors are specifically prohibited from threatening you with harm or violence, using abusive language, annoying you by repeatedly phoning you. They are also not allowed to lie or make false claims or representations or engage in unfair trade practices like trying to impose penalties over and above the terms of the original contract.


While the federal laws are very strict about what debt collection agents can or cannot do, it is also very important for debtors to be proactive about their debts. Appointing an attorney when you have multiple delinquent accounts is a sensible decision, as your rights can then be protected.

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