Every once in a while we get contacted for budgeting services because a potential or current client has started getting calls from collection agencies. This can seem scary and irritating, and can cause some distress, but there are 5 rights you need to know that you have with collection agencies that might help.

1. They can only call during certain times.

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There are specific rules for when collection agencies are allowed to call you. Those times are from 8AM until 9PM, and only during the work week. I know, it’s pretty much your entire day. Still, at least you have a period where you’ll have some peace of mine.

With that said, you could still get calls during off hours by some of the more nefarious collection agencies because they know that most consumers don’t know what the rules are and won’t report them. If this happens your first question should be asking them their name and phone number. They’ll probably hang up because they know they’re not supposed to call. Also, you might see a phone number on your caller ID, but it won’t be them, as many of the sneaky collection agencies use fake numbers to call you when they’re not supposed to.

2. You have the right to ask them to prove you owe what they say you owe.

You have the right to ask them to send you something proving in their eyes that you have an outstanding debt. This can be used either as a short stalling tactic or, if you don’t believe you owe anything, makes them have to go back and investigate whether you really do owe something or not. Regardless of your reason, you should always ask them for proof anyway.

Sometimes the debt has been paid and it wasn’t recorded properly; this happens often. Hopefully you keep some kind of record of paying off debts if you’ve had previous dealings with collection agencies, or you have a credit report. When you receive the written “proof” and you think it’s been paid, you should compare your account number with the one on the credit report to see if it’s the same.

One other thing you need to know is that if you had an outstanding debt and didn’t pay it for whatever reason, it’s wiped off your credit report after 7 years (unless it’s student loan debt or taxes). Yet, there are collection companies that will buy some of this old debt and try to collect on it. You don’t have to pay it, but once again most people don’t know the rules, which means that sometimes they’ll start paying on the claim.

When you put in a request for proof, they can’t call you again until 10 days after they’ve sent what you’ve requested. Since it usually takes them 30 days (some might be faster), you’ll at least get a break from the phone driving you nuts.

3. You don’t have to pay all of what they say you owe.

This might shock you, but the first amount any agency tells you if what you owe isn’t close to being truthful. If what you owe is a debt that’s accrued finance charges since your last payment, you’re really only responsible for the actual balance. For instance, if you stopped paying on a bill that was $3,000 after your last payment, and the agency tells you that you owe $4,200, you don’t even have to pay $3,000. Truthfully, you do owe that amount, but since most collection agencies buy outstanding debt for around 20 to 25 cents per dollar, they’ll often lower the outstanding amount you have to pay on if you agree to a payment plan That should be the starting point for any negotiations.

4. Learn how to negotiate outstanding debt.

Since your original creditor has already been paid by insurance, the agency is going to try to maximize how much they can get from you on your outstanding debt. A good starting point is to see if you can get them to accept half of what they say you owe once you get them to acknowledge the real outstanding balance. They might want certain concessions and deals from you to get there but it can save you a lot of money.

What kind of concessions? If you owe a lot of money and you offer to pay them $20 a month, that’s not going to fly. At best they’ll work with you if you’ll agree to pay off a debt somewhere between a year or two; if it’s a great amount but you can make a large monthly payment they’ll still work with you for a longer period.

However, if you can’t pay what they want your best option might be to let your account stay out there for 7 years and have it automatically be wiped off your credit report. The danger here is that you’ll be in a terrible credit position if you need something like a car loan or you put in for any other type of credit, including a home equity loan until it’s wiped off your report. It could also affect your ability to get certain types of jobs or even moving into another apartment.

5. When you receive a notice or phone call, don’t immediately pay something just to get things going.

Hopefully you listen to our advice at #2. If you don’t pay attention to that one, take this one under serious advisement. If you decide to send an amount of money to an agency without an agreement, that amount can be considered a binding contract agreement. It’s interpreted that you’re saying you know you owe the outstanding amount, including interest, and will pay that amount on at least a monthly basis. You can try to argue against it but the courts will generally side with the agencies on this point.

The best advice we can offer is to always talk to the people on the other side of the line and work out the best deal. Remember, this is the United States; they’re not coming to your house and hauling you to jail, although they could repossess your car. These people want to be, but they’ll usually go for the best deal they can make that you’ll agree to pay.