Picture this: You're relaxing, watching TV with your family. Suddenly, your spouse's phone rings. It's a debt collection agency asking for your contact details.

You're caught off guard. Can debt collectors call family members? What about friends? And what if they reached out to your boss or colleagues? Are they allowed to do that?

Unfortunately, they can. And it's mostly a humiliation tactic.

Still, you'll be glad to know strict rules limit what debt collectors can do and what they can disclose about your financial status.

Your rights when dealing with debt collectors

First, when interacting with a debt collector, ask for written evidence of the debt per the Fair Debt Collection Practices Act (FDCDPA) regulations. Even if you know you owe money, keeping a paper trail is advisable.

If they insist written documentation is not necessary, it's likely a scam. Many nefarious actors are out there, so don’t provide personal information or send money unless you can confirm they are legitimate.

Debt collector limitations

All debt collector agencies and persons must follow the protocol set out by the FDCPA, which was created to protect people from predatory and unfair practices.

Debt collectors calling family, co-workers, or friends is permissible, but only to ask for your phone number or location. They may not pressure them to pay the debt on your behalf, or for that matter even tell them you are in debt.

Usually, they can only contact a person once unless they have reason to believe they were given false information, in which case, they may contact them again. But they cannot leave any messages.

A debt collector can only talk about your debt to your spouse (if they co-signed on your debt), parents (if you are a minor), guardian, executor, administrator, or lawyer (if they are representing you regarding your debt).

Why do debt collectors call family members?

A debt collector may call someone you know or are related to if:

  • You have deliberately avoided their calls
  • They want to make sure they have the correct contact details
  • They're trying to embarrass you to motivate payments
  • They want to intimidate you

How to stop debt collectors from calling

If a debt collector is harassing you, you can:

  • Ask the debt collector to stop calling and send all future communications in writing
  • Send a cease and desist letter to inform them that legal action will be taken if they do not stop calling
  • File a complaint with the Consumer Financial Protection Bureau (CPFPB). They enforce the FDCPA.
  • If you have taken the above steps and the debt collector continues to harass you, consider hiring an attorney to enforce your rights

You could receive compensatory damages for any actual harm suffered, statutory damages of up to $1,000, court costs, and attorney fees.

The other way to stop their calls is simply to pay the debt in full, but if that's not possible, you can look into debt relief options such as debt settlement, consolidation, or a credit card balance transfer.

Ways to get out of debt

Besides bankruptcy, debt settlement, debt consolidation loans, and credit card balance transfers are common ways to clear debt. Which way you choose depends on how consistent your income is and the size of your debt.

Debt settlement

Debt settlement is a type of debt relief that involves negotiating with creditors to pay less than what you owe. Hiring a debt settlement company to handle negotiations on your behalf often facilitates this process.

The debt settlement company will ask you to stop paying your creditors and make regular deposits into a savings account instead. Once enough money has accumulated, the company will use it to repay your creditors.

While you may be able to reduce your debt, your credit score could take a major hit because your creditors will miss out on payments, and your overdue balances will accumulate.

Debt consolidation

Debt consolidation involves taking out a new loan to pay off multiple debts. It's a a good option if you struggle to make your monthly payments or have debt with high interest rates.

There are two main types of debt consolidation loans:

  • Personal loans can consolidate any type of debt including credit card debt, medical bills, and personal loans
  • Home equity loans have lower interest rates than personal loans but require your home as collateral

The goal of debt consolidation is to decrease the interest you pay on your debt, shrink your monthly payment, and simplify your finances by having one creditor and one payment.

Credit card balance transfer

A credit card balance transfer is a transaction in which you move debt from one credit card to another. The new card typically offers a lower interest rate than the old one, saving you money on interest charges.

To do a balance transfer, you must apply for a new credit card that offers a balance transfer offer, such as the Discover it® Balance Transfer, Citi® Double Cash Card, or Chase Freedom Unlimited®.

Once approved for the new card, you initiate transferring the balance of your other card or cards to the new card. In some cases you can request a direct deposit into your account, then use those funds to pay off your other balances.

Or, the new credit card can directly transfer funds to your other card.

In either case, the balance on the new card, and the payments, should be lower, allowing you to save money and pay off the debt sooner.

Don't ignore debt collectors

Ignoring a debt collector's calls to your family could result in continued, tiresome contact with the collector, including potential face-to-face visits.

What comes next could be a bad credit rating and the potential for a lawsuit against you.

So, when a debt collector reaches out to you, be cooperative and respond promptly. At the same time, familiarize yourself with the laws in your state to ensure they stay within legal bounds.

You should also be honest about the debt you owe and the current state of your finances. Instead of avoiding the debt collector, try to focus on finding a way to settle the debt.

And, if you’re in over your head, the National Foundation for Credit Counseling (NFCC) and the Financial Counseling Association of America (FCAA) offer support.

These non-profit agencies provide guidance and resources specifically designed to help you get out of debt.