How to deal with debt collectors

Debt collectors are legally required to follow certain rules when it comes to debt collection, so make sure you know your rights and how to deal with debt collectors if they contact you. There are ways to handle unpaid debts from your original creditor or a third party collecting company on their behalf.

How Debt Collectors Get Your Information

If a business you’ve never heard of contacts you to pay off debt, you might not think it’s yours. But consider that the company that contacts you is not necessarily the one with which you originally had a debt. He might have obtained your address or phone number from a few places, such as the original creditor, your credit report, or an Internet search.

If a debt collector obtained your information from the original creditor, they will have your personal information, such as where you live, the amount owed, and the company you originally owed money to. If you are dealing with legitimate debt collectors, they should have no problem sharing your debt information.

5 ways to deal with debt collectors

If you are dealing with a third party debt collector, there are five things you can do to deal with the situation.

1. Don’t ignore them

Debt collectors will continue to contact you until a debt is paid. Ignoring a debt collector when a debt is yours can further damage your credit score and your report.

2. Obtain debt information

Without admitting that the debt is yours, check with debt collectors before making plans to deal with it. Ask who was the original creditor, the original amount of debt and the amount owed. The more details the debt collector can provide, the better. If the limitation period expired on the debt collector can no longer sue you to collect the debt. Admit a debt is yours can reset the clock on old debt, so never confirm, even if you know the debt is yours.

3. Get it in writing

Legitimate debt collectors are required to mail you a letter detailing your unpaid debt, such as who the original creditor is and how much you owe. You should also get information on how to dispute the debt, which can be helpful if the debt in question is not yours.

4. Do not give out personal information over the phone

Regardless of whether you can pay the debt or not, avoid talking too much. Don’t share anything over the phone, including whether and how you can pay. Instead, request a letter with the original debt information.

5. Try to settle or negotiate

Once you’ve received your letter and can verify that the debt is yours, see if the debt collector will cover some of the cost if you pay up front. If they still want the full amount owed, ask if you can set up a payment plan.

Understand your rights when dealing with debt collectors

Legitimate debt collectors do exist, so it’s important to make sure you can tell when they’re real and when they’re bogus. You have rights when dealing with debt collectors. They must respect the following rules:

  • They have limited contact. Debt collectors are only allowed to call you between 8 a.m. and 9 p.m., and they are not allowed to call you at work. If you get a call outside of these hours, you might be dealing with a debt collection scam.
  • You can request a callback number. If a collection agency is legitimate, they should have no problem providing you with information about the business, including a callback number. Be sure to jot down as much information about the business as possible, including its name and address, if you get it. This is important to see if it works legally in your state.
  • They can’t lie to you or harass you. Debt collectors cannot make you pay more than you owe or threaten you with arrest, jail time, lien or lien. wage garnishment if you don’t pay. Payday garnishment may be legal in your state, but your debt collector will need to sue you first. If a debt collector poses as the police and threatens to arrest you, it is possible that it is a scam; in this case, you can report the threat to Federal Trade Commission and the Consumer Financial Protection Bureau.

How to spot a debt collection scam

Unfortunately, having debt opens you up to a variety of debt collection scams. Even if you don’t owe any money, there are still plenty of people out there who can try to get you to pay. To make sure a debt collector is legitimate, keep an eye out for the following signs:

  • Watch your mailbox. A validation letter is one way to make sure that you are dealing with a legitimate debt collector. If you’ve just received a phone call from a suspected debt collector, ask for a validation letter before attempting to repay the debt in question.
  • Check your contact details. Even if the business is legitimate and the debt is legitimate, it might not be yours. Ask for personal details about the debt, including the original creditor and the amount. While the debt may be real, it could come from someone else who shares your name or from an act of identity theft.
  • Make sure you can pay as you want. If the person on the phone claims you can only pay by wire transfer or prepaid debit card, you may be dealing with a scammer. Even if debt collection is not the most ideal situation, most companies will work with you to get debt paid off on terms you are comfortable with. You should also try to negotiate – many debt collectors are willing to create a plan that helps you pay.

Final considerations

If you get a call from a debt collector, knowing the steps to follow can help you deal with it. There are rules that debt collectors must follow to collect old debts, so it is important to know your rights in this situation. Don’t ignore debt collectors; get as much information as possible and put it in writing. Avoid giving out personal details over the phone to avoid falling for debt collection scams or resetting the clock on old debts.

Image presented by Audrey Saracco from Shutterstock.

Learn more:

Previous YMCA hosts silent auction to benefit scholarship program
Next Debt consolidation is an important tool in putting clients in a stronger position - Adams