What to Do When a Debt Collector Contacts You[yoast-breadcrumb]
What to Do When a Debt Collector Contacts You
Getting a call or letter from a debt collector can be super stressful. Your first reaction might be to ignore it and hope it goes away. But that usually makes things worse – the debt collector will just find other ways to get your attention, like filing a lawsuit.
So take a deep breath. This article will walk you through exactly what to do, step-by-step, so you can deal with the situation in a smart way.
Step 1: Verify It’s a Legitimate Debt
Before you do anything else, verify that the debt is real and belongs to you. Debt collectors sometimes go after the wrong person or try to collect fake debts that don’t exist.
Under the Fair Debt Collection Practices Act (FDCPA), the collector has to send you a written “validation notice” within 5 days of first contacting you. This notice must include:
- The amount you owe
- The name of the creditor you owe it to
- What to do if you don’t think it’s your debt
If you don’t get this validation notice, send a letter demanding it. The collector can’t keep bugging you without proving the debt is real first.
Once you get the notice, verify that the amount and creditor are correct. Check your credit report at AnnualCreditReport.com to see if the debt is listed there. If it’s not, the collector will have a very hard time proving it’s valid.
Step 2: Negotiate a Settlement
If the debt is legitimate and you can’t pay it all right now, try to negotiate a deal. Many collectors will agree to settle for a lower amount, or let you set up a payment plan over time.
Be ready to explain your financial situation. For example, “I lost my job and can only afford $50 per month.” Don’t reveal too many personal details though – stick to basics about your income and expenses.
Get any deal in writing before sending money. The agreement should spell out that the debt will be considered “paid in full” once you pay the agreed amount. Send payments by trackable mail and keep records of everything.
Step 3: Dispute Errors
If you find incorrect info in your validation notice, like the wrong amount owed or creditor name, you can dispute it in writing. The collector then has to stop all collection efforts until they prove the debt is accurate.
Send your dispute letter by certified mail with return receipt. Include your name, the account number, why you think it’s wrong, and any evidence. The collector has 30 days to verify the debt or remove it from your credit report.
Step 4: Know Your Rights
Debt collectors have to follow consumer protection laws. Under the FDCPA, they can’t:
- Call repeatedly to harass you
- Make false statements about what you owe
- Threaten arrest or legal action they can’t or won’t take
- Talk to others about your debt without permission
You can stop a collector from contacting you by sending a cease and desist letter. Make sure to keep records in case they violate the law.
You can sue a collector who illegally harasses you. Remedies can include money for damages, getting the debt erased, and the collector paying your legal fees.
Watch Out for Scams
Some “collectors” are really scammers trying to steal your money or personal information. Never pay a debt or give sensitive info without verifying it first.
Real collectors won’t refuse to send validation notices, threaten violence, or ask you to pay in untraceable ways like gift cards. Hang up if a caller seems suspicious.
Dealing with debt collectors can feel overwhelming. But free help is available:
- Call the Consumer Financial Protection Bureau at 855-411-2372 to ask questions or file a complaint.
- Contact a nonprofit legal aid organization for legal advice and representation.
- Ask a financial counselor at a reputable credit counseling agency for help managing debt.
You don’t have to deal with debt collectors alone. Get the facts, know your rights, and seek assistance to take control of the situation. Relief is available if you just take it step-by-step!