Since debt collection agencies are legally entitled to collect their debt, they do have some power in coming after the debtor, but credit counseling can stop them cold.

Debt Collection Agencies' Rights

• Debt collection agencies can call to inform you that the account in question has been turned over to them for collection and ask when you intend to pay.

• Collection agencies can ask for at least a partial payment immediately.

• Debt collection agencies can contact other people who may know you for the purpose of finding out your address or where you work, although they may not reveal that it is in regard to a debt.

• Debt collection agencies may call you at work until you inform them that this is not acceptable, at which point they must stop.

• The collection agency may also hire an attorney to sue you to collect the debt, which may eventually include seizing of property or garnishment of wages through a court order. If it goes this far, you may be required to appear in court with proof of your income, living expenses and information about your property

What to Do When You're Contacted by a Debt Collection Agency

If you are contacted by a debt collection agency, don't take it personally if they're behaving in a professional manner; instead, figure out a debt management plan or seek help through debt counseling. They're just doing their job, which is to collect a legitimate debt you actually owe. If you can't pay the full amount of the debt, offer to make a partial payment and ask about setting up a payment plan. While the debt collection agency has the right to demand complete payment immediately, most agencies like are willing to negotiate a payment plan. Frankly, if they don't set up a payment plan with you, the debt collection agency will have to go to the expense and trouble of a court procedure to gain a judgment against you in order to collect the full amount of the debt.