Money Fix: Know your rights on debts, set up a payment plan

Debt may not be the topic at the dinner table, but it's on most everyone's mind. A recent survey from The Urban Institute found that 35 percent of people with credit have debts that have been reported to collection agencies.

"It's harder to make ends meet. Costs have increased for housing, clothing, food, gas, utilities, health care. People incurred a lot of debt during and after the recession and still owe on those debts," says Harrine Freeman, author of "How to Get Out of Debt: Get an 'A' Credit Rating for Free."

Whatever the reason, don't make matters worse.

• Avoid collections: If you're having trouble making payments, call your creditors. Negotiate. Often they would rather receive something than nothing.

• Know your rights: If you must deal with debt collectors, "ask for documentation of the debt. If you don't think it's valid, dispute it," says Leslie Tayne, a Melville attorney specializing in debt issues. Collectors also can't treat you any old way -- no calls before 8 a.m. or past 9 p.m., and no bugging you at work if you've asked them not to. Find out about debtors' rights at www.ftc.gov.

• Set up a payment plan you can afford: "Ask the company to confirm the agreement in writing and update your credit report once the account is paid in full," Freeman says.

Know too, says John Calabrese, a financial adviser with MetLife Premier Client Group in Brooklyn, if you settle an outstanding debt for an amount less than the total due, there may be taxes due on the difference.