Guest Post: Jane Sanders

This week, for an "industry" piece, we have a guest post from Jane Sanders who blogs for DebtManagement.net, a site which bills itself as "a resource for people who want to eliminate debt or avoid it in the first place".  Obviously, for those of us experiencing long-term joblessness, debt is a constant issue, so I was happy to feature a piece that Ms. Sanders wrote specifically for The Job Stalker.

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HOW TO KEEP DEBT COLLECTORS AT BAY
WHEN YOU'RE UNEMPLOYED

This guest article was contributed by Jane Sanders from Debt Management.
Visit her site for more information on debt collection.

In this economy, being unemployed is no shame. Many people have lost their jobs due to company cut-backs and layoffs, not due to any malfeasance on their part. People with blue collar and white collar jobs that were thought to be secure are finding themselves suddenly out of work. But no matter what the reason, the bills keep coming and the mortgage is due every month. There are steps that can be taken to handle credit collection agencies.

Know the Law

The first thing a person out of a job should do is find out what the law in their state says about what credit collectors can and cannot do. While a collections company can call to ask for payment plans, they are not allowed to call after certain times, they cannot call neighbors or employers more than once, and they cannot threaten or harass the person who is behind on a payment. They also cannot garnish unemployment benefits or social security checks.

Contact Collection Agency

If the unemployment continues, write to creditors and explain the situation. Try to work out a payment plan. If they send the debt to collections anyway and the collection agency is harassing you, send the agency a certified, return receipt requested letter and ask them to stop contacting you. Do not use a threatening tone in the letter. Explain the reason for the non-payment and let them know that once the situation changes you will be able to start payments again.

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This letter will not eliminate the debt or the obligation to pay. The Fair Debt Collection Practice Act states that the collection agency has to stop contacting you unless they are taking legal action against you for the debt.

If they continue to call, let them know you are taping all conversations. Keep the tapes, along with any letters sent to the collection agency or received from them. One option to prevent the harassment is to hang up when they call. It may not stop them, but there is no law that says a person has to listen to collectors.

What You Should Not Do

Do not automatically file bankruptcy because of the debts. Try to work through the situation. Once you are employed again you can start paying down the debt. Also do not listen to those companies who say they will consolidate your debt. Only credit counselors from legitimate non-profit agencies should be contacted to help you with managing the debt. This is not the same as consolidation.

Tough times will pass. Try to pay down each credit card. Load up on one to get it all paid off, then start on the others. And take the time to know your rights when it comes to handling your debt.

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I think this is very good advice ... aside from her blog, the DebtManagement.net site has a series of videos on financial management, and a number of downloadable tools to help you set up a plan to at least manage the debt you may be dealing with on your way to finding that elusive next paycheck.

Coming up will be another "link dump" on Friday, and a really excellent book on a dramatically different approach to the job search on Monday (along with an author interview) ... and maybe some more networking info.

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