What do you do when a collection agency is ruining your life? Today Clark heard from a caller who had a medical procedure and then moved. A collection agency had been sending bills to the old address for the portion that was unpaid by insurance. Finally, they started making harassing phone calls.

The caller genuinely was ready to settle the debt, but the agency was unwilling to send him any paperwork to verify the amount that was owed.

Under the Fair Debt Collection Practices Act, a collector must send a 5-day letter stating what the debt is, why it's owed and how much they believe you owe. The recipient then has 30 days to respond by either contesting it in writing or making payment arrangements.

There's a lot of intimidation in this industry because most people don't know their rights and responsibilities.

Is a collection agency allowed to repeatedly berate you over the phone? No, it's your right to instruct them in writing not to call you again if they're abusive. The sole exception here is if the collector works for a bank that's trying to collect on its own accounts. They can't be made to stop calling.

You may want to use an answering machine to record your phone calls with collectors. Many states require that you disclose that you're recording. Most collectors who sense they're dealing with somebody who knows their rights will not push it. They're just after money, not a court battle.

Here's another tip: Never give them your checking account number if you want to pay. You may verbally agree on partial payment to settle a debt, and they'll turn around and take extra from your account. Get it in writing first. If you really suspect their honesty, pay by money order or use a separate checking account to settle up.

One final note: Under the statute of limitations, you have a right not to pay old debt once it exceeds a certain time limit. What that limit is varies by both state and the type of debt.

However, if you get hit with a lawsuit over an old debt, you must show up at court and declare the debt past the statute of limitations -- or you'll be hit with a default judgment. Then you'll owe money that legally you had no right to be sued over.

Of course, if you owe, the best action is to always to make partial or complete payment as soon as possible.