Consumer Protection

How to Protect Yourself: Debt

Source: The Florida Attorney General's Office

Debt becomes problematic when a person fails to use credit wisely and can’t or won’t make their payments on time. There are ways to effectively manage your debt repayment, but it will require patience and perseverance. Excessive debt will not disappear overnight. The longer you take to repay the debt, the more you will pay in interest.

Consider credit counseling.

Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But beware, just because an organization says it is a nonprofit doesn’t guarantee that its services are free or affordable or that its services are legitimate. If possible, find an organization that offers in-person counseling. Many universities, military bases and credit unions operate nonprofit credit counseling programs. Your financial institution also may be good sources of information and referrals.

Take care when choosing a credit counseling organization.

Reputable credit counseling organizations advise you on managing your money and debts, help you develop a budget and usually offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. Avoid organizations that push a debt management plan as your only option. Do not sign anything without reading it first. Make sure all verbal promises made by the counselor appear in writing.

Consider a debt management plan.

If your financial problems stem from too much debt or your inability to repay your debts, a credit counseling agency may recommend that you enroll in a debt management plan. A debt management plan is not credit counseling and is not for everyone. Under a debt management plan, you deposit money each month with the credit counseling organization. The organization uses your deposits to pay your unsecured debts, like credit card bills, student loans and medical bills, according to a payment schedule the counselor develops with you and your creditors. Your creditors may agree to lower your interest rates and waive certain fees, but check with all your creditors to be sure that they offer the concessions that a credit counseling organization describes to you. A successful debt management plan requires you to make regular, timely payments and could take 48 months or longer to complete. Consider signing on for one of these plans only after a certified credit counselor has spent time thoroughly reviewing your financial situation, and has offered you customized advice on managing your money.

Make a debt management plan work for you.

Continue to pay your bills until the plan has been approved by your creditors. If you stop making payments before your creditors have accepted you into a plan, you'll face late fees, penalties and negative entries on your credit report. Contact your creditors and confirm that they have accepted the proposed plan before you send any payments to the credit counseling organization for your debt management plan. Make sure the organization’s payment schedule allows your debts to be paid before they are due each month. Call each of your creditors on the first of every month to make sure the agency has paid them on time. Review monthly statements from your creditors to make sure they have received your payments. If your debt management plan depends on your creditors agreeing to lower or eliminate interest and finance charges, or waive late fees, make sure these concessions are reflected on your statements.

Understand what credit repair services can and cannot do.

Some companies offer credit repair services as part of qualified debt management or credit counseling plan. These services are designed to help consumers increase their credit score by identifying and correcting inaccuracies on a consumer’s credit report, as well as helping the consumer to reduce his debt to credit ratio. Credit repair services offered in conjunction with legitimate debt management or credit counseling services can help you better understand your credit history and how to better manage your credit. While legitimate credit repair services offered in conjunction with a reputable debt management or credit counseling service can benefit some consumers, you should avoid companies offering only credit repair services. Often, these companies lure consumers with exaggerated claims promising to erase negative credit history. Accurate account history, positive or negative, will stay on your credit report for at least seven years, and some things, such as bankruptcy, may stay on your report up to ten years later.

Understand what credit card rate reduction services do.

A growing trend within the debt relief industry is companies offering only credit card rate reduction services. Essentially these companies will, for a set fee, negotiate lower interest rates with your credit card companies. In most cases, you can negotiate lower credit card interest rates on your own, without the assistance of a third party. Before you call your credit card company, research the going interest rates for other credit cards and their requirements. Knowing this information shows your credit card company that you have shopped around and might stop using their card. Don’t be afraid to ask for a supervisor or someone authorized to negotiate interest rates.

Do your research.

Before signing up for any debt relief or credit counseling company, be sure to investigate its reputation. Check with the Better Business Bureau at to see whether consumers have filed complaints against the firm. Additionally, you may call the Attorney General’s Office in the state in which the company is based to determine whether they have received any complaints. Ask whether the firm is required to have a particular license or certification to operate in your state.

What is a debt collector?

Should you fall behind on your payments, you will likely receive calls from a debt collector. A debt collector is someone who regularly tries to collect debts owed to others, including collection agencies, attorneys who collect debts and companies that buy debts and attempt to collect.

How may I be contacted?

A debt collector may contact you in person or by mail, email, telephone, telegram or fax. However, a collector may not communicate with you or your family with such frequency as can reasonably considered harassing. A debt collector may not contact you at work if the collector knows your employer does not approve, nor may a debt collector contact you at unreasonable times, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector is required to send you a written notice within five days after you are first contacted, telling you the amount of money you owe. The notice must also specify the name of the creditor to whom you owe the money and what action you should take if you believe you do not owe the money.

How do I stop collection calls?

You may stop a debt collector from contacting you by writing a letter to the agency telling them to stop. Once the agency receives your letter, they may not contact you again except to say there will be no further contact or to notify you if the debt collector or the creditor intends to take some specific action. If you do not believe you owe the debt, you should write to the collection agency within 30 days after you are first contacted, saying you do not owe the money. The agency may not contact you after that unless you are sent proof of the debt, such as a copy of the bill.

What rules must debt collectors obey?

A debt collector may not harass or abuse anyone. For instance, a debt collector may not use threats of violence against the person, property or reputation; use obscene or profane language; advertise the debt; or repeatedly or continuously make telephone calls with the intent to harass or abuse the person at the called number. In addition, debt collectors are required to accurately disclose their identities to the person at the called number. A debt collector may not use false statements, such as falsely implying that they are attorneys, that you have committed a crime or that they operate or work for a credit bureau or misrepresenting the amount of your debt, the involvement of an attorney in collecting a debt or indicating that papers sent to you are legal forms when they are not. Debt collectors may not tell you that you will be arrested if you do not pay; that they will seize, garnish, attach or sell your property or wages unless the collection agency or creditor intends to do so and has a legal right to do so; or that a lawsuit will be filed against you, when they have no legal right to file or do not intend to file such a suit.

Beware imposter debt collection.

Imposter scams are on the rise, and an imposter scam affecting consumers nationwide is imposter debt collection. Consumers receive a phone call from a person trying to collect on a debt that the consumer never incurred or a debt that had been previously paid off. Others receive calls from a person collecting on a valid debt but do so without the authorization or knowledge of the consumer’s creditor. If you believe a caller may be a fake debt collector, ask the caller for his or her name, the name of the collection company, the caller’s contact information and the company to whom the debt is owed. Tell the caller that you will not discuss the debt until you receive a validation notice by mail. If the caller refuses to provide this information, he or she is either an imposter or a debt collector acting illegally. Before paying a debt that you supposedly owe, contact the original creditor to determine whether the business has authorized a collection company to collect on the debt.

File a complaint.

If you wish to file a complaint against a credit counselor, debt management firm or debt collector, you may do so with the Attorney General’s Office online at or by phone toll-free at 1-866-9-NO-SCAM. You should also file a complaint with the Florida Office of Financial Regulation online at or by phone at (850) 487-9687. Additionally, you may file a complaint with the Consumer Finance Protection Bureau (CFPB), a federal agency tasked with reviewing consumer complaints about consumer financial products and services. File a complaint with the CFPB online at or call toll-free at 1-855-411-CFPB.

You may also file a complaint with the Florida Department of Agriculture and Consumer Services, which acts as the State's consumer complaint clearinghouse, at