For many, life in the financial fast lane comes to a screeching halt with a phone call.
The insistent voice on the other end of the line belongs to a collection agency employee. It's ultimatum time: Pay your overdue account, in full, now.
Although the walls seem to be closing in, control is still yours to wield.
Several options are available that can help you -- and your creditors.
"First, the consumer should listen to what the collector tells them and find out how much they owe," said Lee Snyder, an executive with a city collection agency. "If they cannot pay the bill, they should describe what their particular problem is to the collector and try to work out an arrangement to pay the debt."
Once an outstanding debt gets to the collection stage, you only compound the situation by taking no action and trying to ignore it, said Mr. Snyder, who's president of the Credit Adjustment Bureau of Baltimore Inc.
"Where a person doesn't want to pay the debt, we can advise our client of the circumstances," Mr. Snyder said. "We can obtain the client's permission to refer the account to an attorney."
On the other hand, cooperating with the collector is an indication that you want to take care of your financial obligations. It makes the collector more inclined to work with you, he said.
Not all consumer-collector exchanges proceed quite so cordially, even though Mr. Snyder noted that the American Collectors Association doesn't condone antagonistic antics by collectors.
But if things do take an ugly turn, consumers have options to deal with that, too, according to the agency that regulates the more than 500 collection agencies in Maryland.
Federal and state laws establish limits collectors must follow when trying to collect delinquent accounts, according to Mike J. Jackson, who is with the office of the state Commissioner of Consumer Credit.
For example, a bill collector can't disclose, or threaten to disclose, to anyone other than you any information regarding your credit worthiness, Mr. Jackson said.
Nor can a collector contact your employer about your debt without first getting a judgment, according to Mr. Jackson.
Does a collector call at 7 a.m. or several times a day? That's verboten, too, Mr. Jackson said. It is legal to make calls only between 8 a.m and 8 p.m., and the frequency should be no greater than one per day, he said.
It's illegal for a collector to claim to be an attorney, threaten physical violence, or claim that law enforcement officials will pursue you -- unless the debt is related to bad checks, for example.
Calls made to your job aren't illegal, unless you have sent the collection agency a letter stating that such calls are prohibited and asking that they stop, Mr. Jackson said.
If you have a complaint about a collection agency, call the Commissioner of Consumer Credit at 333-6830.
The commission "will do everything to make sure that the practices cease," Mr. Jackson said. "Certainly the party that's injured has a legal recourse that they can pursue against the bill collector if there's any violation of Maryland or federal law."
If, after assessing your debts and income, you feel there's no way to pay off your delinquent bills, turning to a non-profit organization like the Consumer Credit Counseling Service of Greater Baltimore may be the next step.
Sometimes, collection agencies reach that realization before you do, according to Henry W. Bahne, executive director of the counseling service.
"If the collector is really astute and really service-oriented, to prevent the person from going off the deep edge and possibly going into a bankruptcy situation that may not be warranted, the collection agency will send them to us," Mr. Bahne said.
Before taking any action, Mr. Bahne's agency will ask you to list all income and all debt.
"It's kind of like going to a doctor. We do a thorough examination of the person's financial situation," he said. "That gives us a diagnosis and prognosis right off the bat.
"Often, it's a question of just basic mismanagement," he said. "The person really needs to be placed on a budget and prioritize spending and expenses, so that all the obligations are met. Often they have sufficient funds to meet their obligations."
If that's the case, the counseling service will give you a financial plan that includes ways for you to cut costs.
One commonly recommended cost-containment measure is to carry a lunch instead of going to a restaurant. "On average, this can run anywhere from $60 to $100 a month," Mr. Bahne said.
Or you may have to cut some other expenditures. "We routinely see consumers who are spending anywhere from $20 to $25 dollars a week just in lottery [tickets]," he said.
Sometimes, a debtor's financial state has deteriorated so much that it can't be saved by budgeting.
If that has happened to you, the Consumer Credit Counseling Service will serve as a go-between between you and your creditor, Mr. Bahne said.
An agreement will be negotiated whereby creditors agree to take reduced payments.