The Reality Reports

Understanding The First Phone Call: Getting a call from a collection agency can feel stressful, especially if you were not expecting it. Debt collectors are companies hired to collect money that is owed on unpaid bills like credit cards, medical debt, personal loans, or old utility accounts. The first thing to remember is to stay calm and avoid making quick decisions. Do not give personal information right away. Ask for the name of the company, the amount they claim you owe, and the original creditor. In many cases, collection agencies buy old debt from lenders for a lower price and then try to collect the full amount from consumers. You also have legal rights under the Fair Debt Collection Practices Act, often called the FDCPA. Debt collectors cannot threaten you, harass you, or call at unreasonable hours.

Lending money to people you care about seems like the right thing to do. When your sister needs help with rent or your best friend faces an emergency, saying no feels heartless.  But money has a way of changing relationships, and not always for the better.