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Million of Americans are carrying debts in their daily life. And that is a good reason why there are more than 6,000 debt collection agencies in the United States. Most of these agencies operate their businesses under the law but we are sure that there are some of them do not. According to the Better Business Bureau, the complaints to debt collection agencies are increasing dramatically in 2007. So it’s necessary to understand some basics to deal with the aggressive debt collection agencies even if you legitimately owe the debt.

A collection agency is a business that pursues payments on debts owed by individuals or businesses on behave of the debt owners. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed. However, some agencies, sometimes referred to as “debt buyers”, purchase debts from creditors for a fraction of the value of the debt and pursue the debtor for the full balance.

Here are some tips on how to deal with debt collection agencies:

1. Avoid your debt goes to debt collection. Believe it or not, once your debt is transferred to a debt collection agency, things will go worse. The best strategy is try to contact and negotiate with your creditor and work out a reasonable payment arrangement.

2. There is a law out there to help you. You should know that The Fair Debt Collection Practices Act (FDCPA) helps you fight back against unfair, unethical and even illegal bill collection tactics! The U.S. Federal Trade Commission (FTC) also has several publications designed to educate consumers about their rights under The Fair Debt Collection Practices Act. Harassing and nuisance phone calls, threats and abusive language are illegal and should be reported to the FTC and your state attorney general’s office.Don’t feel scared when you are dealing with a debt collector.

3. Don’t ignore notice from debt collectors. It’s a wrong wrong way to deal with debt collectors if you just ignore their notice (letters or phone calls). You should remember that the debt collectors might have your personal information including social security number. You are allowed to send written requests for verification of debt within 30 days of being contacted by a debt collector. If a collection information appears on your credit report, your credit will be ruined in the next 7 years. It will affect your ability to get low rate loans, cheap insurance and great rewards credit cards.

4. Keep copies and records. It’s a good habit to keep important files when you are dealing with debt collectors. Some experts would suggest you keep those documents forever. Because you don’t when you would use them again—specially proof of settlement or resolution of debts. This is an important step to protect yourself. You should also bear in mind that any agreements for making debt collection payments should be confirmed in writing and signed by the debt collector before sending in any payments.

5. Keep an eye on your bank accounts. There are some cases that debt collectors might file suit against consumers for nonpayment of debts. And if they win the lawsuit, freezing savings or checking accounts is one of the court-ordered options for collecting debts. What would happen if your bank accounts are not usable? I can’t imagine a life without any bank accounts! However, funds for Social Security or disability checks are exempt and cannot be used as a source of court-ordered debt payments.

The FTC Facts for consumers might be helpful to everyone too!