First let me make it clear that if you borrowed money from anybody, whether from a friend, a credit card company, a bank or whatever, you need to pay it back. That's the law, and it's also right, moral and just.
However, debt collectors also must abide by the law, and because most of us find being in debt and not being able to pay for it an excruciatingly embarrassing situation, we are emotionally easy targets for some unscrupulous collection tactics and this can push us into some foolish decisions. Although we paid it off a long time ago, there was a time when my student loans (which I have told my children NEVER to get) were in arrears, and our lives were made a misery for about a year by debt collectors who ignored the law. I wish I had known then what I have learned this month, but I didn't.
First of all, while it's reasonable to scrimp and eat beans and rice to pay your debts, it is not acceptable to skip meals or let your house or rent payment go into arrears. Every month feed your family (not eating out, not buying steak, but basic necessities) and shelter them (not at the Ritz) first. Divide up what is left to pay your bills and do not let a bullying debt collector browbeat you into pushing his debt to the front of the line. Make them play by the rules, too.
There are rules. You can read them here. Here are a few:
If they already have your information and can contact you, it is illegal for them to call any third parties to embarrass you.
Unless you give them permission (and don't), it is illegal for them to call you outside of reasonable hours (our debt collector called us every morning for six months- at 5 and 6 a.m. That was illegal. They cannot call before 8 a.m. or after 9 p.m.).
If you tell them not to call your place of business or your employer (do this in writing), they must NOT call there anymore.
They may not call you continuously, hanging up and calling again, and again. (ours did this, too).
It's illegal to call you names, make slurs about your character, religion, or ethnicity (ours did this, too).
A debt collector WANTS to upset you because when you are upset, you are not thinking clearly. When you are upset you let yourself get pressured into irrational decisions that are not best for your family. It is their goal to make you mad, scare you, hurt your feelings, make you cry- these things are a plus from their point of view. You can't take care of your family's finances if a debt collector is able to use a verbal baseball bat to whack you off course from what you have calmly and rationally planned to do into some line of action that is best for him rather than for you.
So first of all, when a debt collector calls you, stay calm. You are usually not in immediate danger of going to jail, losing your house, or having your name published and shaming yourself for ever- and especially not if it hasn't even gone to court yet (and they may tell you it is going to court, but unless there are written papers with dates and locations in your state, that's probably not true, and that is also illegal). So it's hard, but be calm.
Get their information- the name of the person talking to you, the name of his employer, the debt amount and what it is for, and the phone number and snail mail address of the debt collection agency. Instruct them not to call you again that day.
Hang up. Politely, but quickly.
Write them. There are numerous sample letters on the internet that would tailor to fit your situation, whether you need to dispute the debt, need them to verify the debt (not the only reason, but one reason my college loan debt got so far in arrears is because somehow the amount changed when the debt changed hands, and whenever I asked for verification of the amount, the agency would just sell it off to a new collection agency), need to inform them you know their legal limitations and expect them to stand by the law, or you just want to make them verify the debt, which they must do if you ask, to buy a bit of breathing space. Here's one.
Do NOT send money based on any verbal agreement- definitely not a post-dated check. Insist on a debt settlement agreement in writing. Do not accept excuses. They can send it via snail mail. They won't want to, but they can.
Now, do be reasonable. If you owe the money, you owe the money. Don't back them into a wall, either, by refusing all contact and never making any good faith effort to work out a payment plan. Work out a payment plan, inform them what it is and how often they may contact you (once a week might be fair), and keep up your end. Just don't let yourself be emotionally bludgeoned into more than you can actually reasonably do.
The Fair Debt Collection Practices Act is here. you should read it if you have debt collectors in your life.
Here is one Mom's account of her dealings with unscrupulous debt collectors and how she handled it.
There is a statute of limitations on old debts and it is illegal for the collector to try to collect after those dates. Now- I don't advocate using this to avoid payment of a debt you owe. HOWEVER, your knowledge of this could be leverage in getting a rude collector to tone it down.
Knowing your rights and expecting debt collectors to respect them can save you money as well as stress. In our case, we allowed the bullying of the debt collector for my college loans to pressure us into making a bad financial decision- to get them off our backs sooner we made only minimum payments on another debt so we could pay them off faster, when we would have been able to pay off *both* bills and saved a chunk of interest if we had made the smaller payments on the college loan while first paying off the other debt with larger interest payments.