How to deal with collectors and collection agencies the Dave Ramsey way

Dave Ramsey is one of America's most prominent personal finance experts, and probably the most vocal advocate of getting out of debt and staying out of debt. He has a lot of advice for those dealing with collection agencies.

	Before you start dealing with them, commit to getting out of debt and living on a plan (called a budget). If you don't, you'll be back in debt and dealing with new collection agencies before you know it.
	Keep your cool during collection calls. Collectors use various tactics to get you emotional so that you'll pay them instead of buying food or paying for the lights. If you find yourself getting upset, tell the collector you'll talk to him some other time.
	Prioritize. Food first, basic clothing second, then utilities, then transportation, then the house, then debts. If you can't take care of the important things first, don't pay the collectors a penny.
	Try to work deals. The agency probably bought your debt from the original lender for pennies on the dollar based on how much they expect to collect. They are willing to make deals. They'd rather have $500 than $0 even if you owe $1000.
	Once you reach a deal, get the deal in writing. If it's not in writing, they will go back on their word once they have your funds. You will need to keep the written agreement as well as proof of payment for the rest of your life.

• Know your rights under the Federal Fair Debt Collection Practices Act. This is federal law that dictates what a collection agency can and cannot do when collecting debts. For example, they are not allowed to threaten violence or jail, or call you at work once you've told them to stop.
• If you have absolutely no money at all, you can tell the agency never to contact you again unless they are suing you. They must, by law, comply with that request. However, this should be an ultimate last resort.
• Never give collectors post date checks. They will cash them before the date shown, and your bank will almost certainly honor them.
• Never give collectors electronic access to your checking account. They will empty out every penny in there and you will have no realistic recourse.