What to Do When Discover Collections Comes Calling
So, you‘ve got a debt collector from Discover Collections hounding you about an old credit card debt. Maybe they’re blowing up your phone or sending threatening letters. It’s a stressful situation, no doubt. But don’t panic! You have options and rights when it comes to dealing with debt collectors. Let’s break it down.
Know Your Rights Under the FDCPA
First things first – familiarize yourself with the Fair Debt Collection Practices Act (FDCPA). This federal law prohibits debt collectors from using abusive, unfair or deceptive practices to collect debts from you.4 They can’t harass you, threaten violence, use obscene language, or pretend to be someone they‘re not (like an attorney or government agency).4The FDCPA also requires debt collectors to provide certain information, either in their initial communication with you or within 5 days after. This is called a “validation notice” and it must include:4
-- The amount of the debt
- The name of the creditor you owe
- A statement that you have 30 days to dispute the validity of the debt
If you request verification of the debt in writing within that 30 day window, the collector must suspend collection efforts until they provide you proof of the debt.4 Use this to your advantage to buy yourself some time and make them substantiate their claim.
Don’t Ignore Collection Attempts
As tempting as it may be to just ignore those pesky calls and letters, that‘s usually not a wise move. If you go radio silent, you risk the collector escalating matters by suing you in court to collect the debt. And if you fail to respond to a lawsuit, the court will likely grant a default judgment against you.2A judgment gives the collector stronger tools to come after your money, like garnishing your wages or bank account or placing liens on your property.4 It‘s much harder to fight a debt once a judgment is entered. So even though engaging with a debt collector is no picnic, it‘s better than ending up in legal hot water.
Request a Debt Validation Letter
One of the first things you should do when a collector contacts you is send them a written request for a debt validation letter. Under the FDCPA, you have 30 days from the initial communication to dispute the debt and request verification.4A debt validation letter should include:12
- Proof that the collector owns the debt/has authority to collect
- A copy of the original written agreement with your signature
- An account statement showing the amount owed
- The date of your last payment
- Explanation of any fees/interest added
Requesting this forces the collector to substantiate the debt before continuing collection efforts. They can’t just take your word for it that this is your debt. The onus is on them to prove that you owe the specific amount they claim and that they have the legal right to collect it from you. If they can’t validate the debt, you may be off the hook.
-Check the Statute of Limitations
Another important thing to look into is the statute of limitations on the debt. This is the limited window of time that creditors or collectors have to sue you to recover a debt.4 Most states have statutes of limitations falling between 3-6 years for credit card debts, but it varies by state and type of debt.4If the statute of limitations has expired on a debt, that doesn’t mean you don’t owe it anymore. But it does mean the collector can’t successfully sue you over it. The debt is considered “time-barred.”2However, be very careful about making any payments or acknowledging a time-barred debt in writing. Doing so can actually restart the clock on the statute of limitations!2 The collector may try to trick you into inadvertently reviving a debt that was past the legal deadline. Don’t fall for it.
Negotiate a Settlement
Okay, so let‘s say the debt is legitimately yours and the collector has the legal right to come after you for it. That doesn‘t necessarily mean you have to pay the full amount they’re demanding. You may be able to negotiate a settlement for less.Remember, debt collectors often buy debts from the original creditor for pennies on the dollar.2 So even if you pay a fraction of what you originally owed, they’re still making a profit. And many times, they’re willing to accept a lump sum settlement to resolve the account rather than spending more time and resources trying to collect the full balance.A good starting point is to offer 30-50% of the total debt.2 So if you owe $1,000, propose a $300-$500 payment to settle it in full. They‘ll likely counteroffer, but you may be able to meet somewhere in the middle. Just make sure you get the agreement in writing before sending them any money!
Consider Hardship Programs
If you’re really struggling financially, see if the collector will agree to a hardship program. Some have policies in place to help people experiencing difficulties like job loss, illness, or divorce.2 They may be willing to accept smaller monthly payments for a period of time or even waive some fees or interest.Again, get any arrangements in writing. And be realistic about what you can afford. Don‘t agree to a plan that will still leave you drowning each month. Explain your financial situation and propose a reasonable solution given your limited resources.
Dealing with Discover Collections
So how does all this apply when the collector in question is Discover Collections? Well, Discover is a major credit card company that sometimes uses third-party debt collectors to go after past due accounts. They also have their own internal collection department.Whether Discover itself or a collector working on their behalf is contacting you, the same rules and strategies we‘ve covered apply. Discover and their agents must abide by the FDCPA when attempting to collect a debt from you.4 That means no harassment, no false threats, no deceptive practices.Request debt validation in writing within 30 days. Dispute the debt if you think there’s an error or it’s not really yours. Check to see if the legal time limit for them to sue you has expired. And try to work out a settlement or payment plan if you do owe the debt and want to resolve it.One thing to note is that sometimes, the original creditor (like Discover) is exempt from the FDCPA.3 The Act mainly applies to third-party collectors. But even if Discover itself isn’t subject to the FDCPA, any outside collector they hire to collect a debt IS covered.3 And Discover still can’t engage in illegal, deceptive or abusive tactics to get you to pay up.