AS THE CREDIT CRUNCH rages on, debt collectors have become even more aggressive. And while consumers are largely shielded from debt collectors' more obtrusive money-gathering techniques, business owners have few protections.

Barbara Clark, co-owner of Healthy Home Insulation, a spray foam insulation contactor in Vero Beach, Fla., found this out when she let three of her loan payments slip past their due dates. Clark says she had never been late on payments before, but as her sales plunged 50% in the past year, she started struggling to afford them.

The collection calls soon followed. Clark says her three telephone lines regularly receive anywhere from 30 to 90 calls from a single debt collections agency each day. When she complained to her bank, she was told to “pay up.” And while she intends to do so, Clark says having to answer the phone every few minutes certainly doesn’t help. “I’ve done everything I can do to avoid this. But business is really slow right now… I’m not a deadbeat,” she says.

Delinquencies on commercial and industrial loans jumped to 3.1% in the first quarter of 2009, up 117% from a year ago, according to the Federal Reserve. As sales continue to slide, many more businesses are expected to join these ranks, says Michelle Dunn, a small business credit and debt-collections consultant in Groton, N.H.

Making matters worse, businesses aren't protected from debt collectors under the Fair Debt Collection Practices Act (FDCPA), which bars consumers from being threatened, harassed or called at work, and state laws offer few protections to businesses, she says.

Of course, one way to avoid an onslaught of collections calls – not to mention a blemish on your credit report – is to do everything in your power to make your debt payments, says Dunn. Cut costs and explore other revenue-raising activities that can help. If you’re in debt trouble today and those options are no longer viable, here are some ways to get the debt collectors off your back:

Establish a repayment plan

Contact your creditor or vendor that you’re late in paying immediately, suggests Doug Rosner, a director at Goulston & Storrs, a corporate law firm in Boston. “Communication is vital, especially if it’s with a vendor [or creditor] you want to maintain a relationship with,” he says. Explain your financial situation then ask if they would consider a repayment plan in which you could pay a reduced amount over a longer period of time, he says.

To get vendors or creditors to accept such an arrangement, provide a promissory note, a personal guaranty or collateral such as a lien against a second home or equipment, suggests Charles Thomson, in-house counsel for the Doall Company, an industrial supplies and machine tool distributor in Wheeling, Ill.

Work out your debts

If paying in full is impossible, request a “workout” under which all parties agree on a reduced debt amount, says Robert J. Hobbs, deputy director of the National Consumer Law Center in Boston. If your only other option is filing for bankruptcy protection, vendors, creditors and even debt collectors will often be much more accommodating, he says. If your debts are “unsecured” – that is, they aren’t backed by assets that may be liquidated in a bankruptcy proceeding – creditors risk getting nothing if you file for bankruptcy, says Hobbs.

Make partial payments

Another option for borrowers who can’t handle paying in full is to make partial payments toward reducing their outstanding debt upon each new order they place, says Thomson. So a debtor would pay $1,000 toward his or her old balance with every order for $500 in new goods, he says. This strategy works well with debts owed to vendors with whom they’d like to continue working, he says.

Play hardball

If you suspect the debt collection agent who is calling you isn’t legitimate, ask whether they’re licensed, (most states require collection agencies to hold a permit or license), says Thomson. If they don’t have a license or if they’re not forthcoming, notify the regulator in your state. Depending on the state, the regulator may be the Department of Professional Regulation, the Department of Financial Institutions or the Secretary of State, he says. Just keep in mind that the law only applies to third-party agencies trying to collect debts on behalf of creditors. They do not apply to one merchant calling up another merchant and demanding payment of a past due invoice, says Thomson.

Worst-case scenario: File for bankruptcy

If all else fails, filing for bankruptcy can get rid of those pesky debt collectors, says Hobbs. While this is an expensive process and one that you undoubtedly want to avoid, it is a business’s primary form of protection from creditors, he says. It will often wipe out most – if not all – of your business’s debts, especially those held by debt collectors, which are generally unsecured, he says.

-Write to Diana Ransom at dransom@smartmoney.com

Other recent smSmallBiz stories:

• Should You Hire Your Family?
• New Small-Business Loans: Financial Help for a Few Lucky Shops