SACRAMENTO, Calif. — Debt collectors. Next to the dreaded taxman, they're probably the most-feared financial folks around.

And chances are, if you owe money on a delinquent loan, a credit card bill or a medical payment, you've heard from a debt collector. Some work in-house for creditors; some are hired to collect on a company's behalf; others buy up bundles of old debts and try to pursue repayment.

To look at how they work and what you should know, we sat down for a Q&A with Robert Tavelli, former president of the California Association of Collectors Inc. and owner of a private debt collection firm in Santa Rosa, Calif.

For help near you, look up the National Foundation for Credit Counseling at www.nfcc.org or the Association of Independent Consumer Credit Counseling Agencies at www.aiccca.org. The California Association of Collectors maintains a consumer website, www.askdoctordebt.com, to answer debt-related questions and explain consumer rights

Here are some of Tavelli's answers to questions from McClatchy Newspapers readers:

QUESTION: Debt collection consistently ranks high on U.S. consumer complaint lists. Last year, the Federal Trade Commission put it No. 2. Why do debt collectors have such a bad reputation?

ANSWER: There's always conflict when you call a consumer and they don't want to pay. Fortunately, there are very few bad actors. But they make big headlines. Unscrupulous debt collectors are those who break rules, who go after debt they shouldn't, who try to sue for debt that's 15 years old. Most debt collectors — about 97 percent — do it right.

That's where AskDoctorDebt.com came in. It's an effort to give consumers a better understanding of what we do; a way to separate us from the bad actors.

Q: What are your debt-collecting strategies? How often do you go after bad debts in court?

A: It starts with a conversation. We send out a notice, listing (what they owe) and their rights. We follow up with a phone call within four to five days, asking if they got the notice. We're here to collect the debt but to work with (consumers) to try and resolve it.

It's talking to people, listening. Not shutting them down. You have to have a dialogue. You do get more bees with honey.

Everybody assumes we sue everybody. That's not accurate. Only half a percent of the people who get turned over for collection get sued for nonpayment. If they can't pay, we don't pursue them in court. Those who get sued are those who have the ability to pay but refuse to deal with it.

Q: The recession appears to have dropped overall consumer debt. How has it affected what you do?

A: The recession has increased the volume of business, and we're working 10 times harder to recover the same amount of debt. People don't have the money.

Typically about 3 percent (of consumer debt) gets turned over for collection. Today, it's running around 6 percent. Our job is to help companies find the ones who can pay. Our job is not to go after people who can't pay.

Instead of 17 percent to 18 percent recovery on consumer debt two years ago, it's now down to 13 percent nationally. Part of our job is to periodically check back and ask people to pay when things do turn around, so they can resolve their debts.

Q: As debt collectors, you're different from debt settlement companies (that take a fee to work out a consumer's debts with creditors) or credit counseling agencies (that offer financial counseling and repayment plans, generally for little or no fee).

A: The consumer needs to know the difference. We represent creditors to negotiate resolution of a debt between (a company) and a consumer. It could be debt owed to a hospital, an auto parts store, a veterinarian. My fiduciary responsibility is to the creditor. My duty is to collect.

I have a bias that it's not in your best interest to work with debt settlement companies. They sometimes have consumers stop paying on bills in order to negotiate a settlement with creditors. It delays payment to creditors, it delays resolution, it makes matters worse before they get better. And, the consumer often has to gather enough money to pay (the debt settlement fee) upfront. On the other hand, credit counseling services teach consumers how to manage their finances and how to not get in the same problem again.

Q: What's your negotiating style in going after debt?

A: Generally, the idea is to evaluate the consumer's ability to pay and establish a payment plan that's resolved in a reasonable amount of time, say three to six months, depending on the (amount owed).

Let's say you owe $1,500.63. How much are you short? Can you pay $500 down and $100-$200 a month? It has to be a realistic payment plan that's consistent and fair.

If they can't pay, they may need to look at alternatives: consumer credit counseling or possibly filing bankruptcy.

Of the 3 to 6 percent of consumers whose bills get turned over for collection, I would say 99 percent want to pay their bills. But a lot of people just simply can't. They may not have any assets whatsoever.

Q: What kind of reaction do you get when people pick up the phone and hear why you're calling?

A: Honestly, I think collection agencies receive more abuse than they give out. I had a guy years ago who threatened us with a bombing. I had a woman the other day, calling about a $2,000 or $3,000 deficiency balance on a car loan, who left the most foul-mouthed voice mail. She used every word in the book.

Another guy threatened to kick my butt. ... Eventually, he paid it off and came into my office, much calmer, and apologized.

People are under stress when they're in debt. ... Our job is to sit down and work out a solution. We're trying to prevent "repeat performers" so a person has a chance to start over.

———

KNOW YOUR RIGHTS:

If you're behind on paying your bills — or a creditor's records mistakenly make it appear so — a debt collector may be contacting you.

Under the federal Fair Debt Collection Practices Act, debt collectors cannot use abusive, unfair or deceptive practices. Here are some common questions:

QUESTION: What types of debts are covered by the Fair Debt Collection Practices Act?

ANSWER: Personal, family and household debts, including money you owe on a credit card, auto loan, medical bill or mortgage. It doesn't cover debts incurred to run a business.

Q: When can a debt collector contact me?

A: A debt collector may not contact you before 8 a.m. or after 9 p.m., unless you agree. Collectors cannot contact you at work if told, orally or in writing, that you're not allowed to take calls.

Q: How can I stop a debt collector from contacting me?

A: Talk with them at least once to see if you can resolve the matter, even if you can't repay immediately or think the bill is in error. If you don't want collectors contacting you again, tell them — in writing, by certified mail — to stop. They may not contact you again, except: to tell you there will be no further contact or to inform you of a specific action, such as a lawsuit.

However, sending a letter does not get rid of your debt. The debt collector can still sue you to collect.

Q: Can a debt collector contact anyone else about my debt?

A: If you're represented by an attorney, the debt collector must contact the attorney, not you. If you don't have an attorney, a collector may contact others — but only to find your address, home phone number and where you work. Generally, a debt collector is not permitted to discuss your debt with anyone other than you, your spouse or attorney.

Q: What must the debt collector tell me about the debt?

A: Within five days of first contacting you, a collector must send a written "validation notice" stating how much you owe, the creditor's name and how to proceed if you don't think the money is owed.

Q: What practices are prohibited by debt collectors?

A: Harassment, lying and making threats.

They cannot:

Use threats of harm or violence; use obscene or profane language; repeatedly use the phone to annoy someone; publish a list of people who refuse to pay their debts; claim they are attorneys, government agents or work for a credit reporting bureau; falsely claim you have committed a crime or will be arrested if you don't pay; try to collect interest, fees or other charges unless your credit contract allows them; deposit a post-dated check early; contact you by postcard.

Q: Can I control which debts my payments apply to?

A: Yes. If a debt collector is trying to collect more than one debt, payments must be made to debts you select. Also, payments cannot be applied to a debt you don't think you owe.

Q: Can a debt collector garnish my bank account or wages?

A: Yes, if it's done by a court order. If you don't pay a debt, a creditor generally can sue you to collect. If they win, the court will enter a judgment against you, stating the amount of money you owe. It also allows a garnishment order directing a third party, such as your bank or employer, to turn over your funds as payment. Don't ignore a lawsuit summons. If you do, you'll lose the chance to fight a wage garnishment.

Q: What if I think a debt collector has violated the law?

A: You have the right to sue a collector in state or federal court within one year from the date the law was violated. If you win, the judge can require the collector to pay for any damages suffered, such as lost wages and medical bills. The judge can require the debt collector to pay you up to $1,000, even if you can't prove actual damages. You also can be reimbursed for your attorney's fees and court costs.

Note: Even if a debt collector violates the Fair Debt Collection Practices Act in trying to collect a debt, the debt does not go away if you owe it.

Q: What should I do if a debt collector sues me?

A: Respond to the lawsuit, either personally or through your lawyer, by the date specified, to preserve your rights.

Q: How do I report a debt collector's alleged violation?

A: Contact your state attorney general's office, http://www.naag.org, and the Federal Trade Commission, http://www.ftc.gov or call 877-FTC-HELP.

For more information, go to: http://www.ftc.gov/credit/ and http://www.MyMoney.gov/.