8 Important Things to Do if Collections Agencies Are After You

By Sara

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Last Updated: November 21, 2022

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Being in debt can already be a stressful situation. Having a collection agency call you about your debts can make the situation even worse and cause you to panic.

If you get a call or letter from some or all of your debt, there are eight important things to do to make sure you are using your rights and not making the situation worse than it already is. 

 

 

8 Important Things You Should Do if Collections is Coming After You

1. Understand how they got your information.

When a collection agency contacts you, it's important to understand how they got ahold of your information.

For example, when you have a debt in default, meaning you haven't made monthly payments for a certain period, the creditor you have that debt with can sell your information to a debt collection agency.

The debt collection agency will be responsible for collecting the debt. Debt collectors will get your personal information like your phone number and address, how much debt is owed, and who it is owed to. 

 

2. Be careful what you say.

When talking with a collection agency, be smart about communicating with them. Debt collectors will continue to call you until you answer the phone. They may even call your family. It's best to answer their call but don't share any information. Ask them for information. 

Never confirm your debt or share any plans, like if you can pay this debt or how you plan to pay this debt. Only ask for information about your debt. They will try to get you to talk more, but less is more in this situation. Always record the call as well for backup. 

 

3. Get debt information.

When a collector calls you, simply ask for the debt and never admit the debt they are calling about is yours.

When a collector calls, they legally have to tell your information about your debt over the phone and in writing.

They need to give you:

  • the creditor's name
  • contact information
  • the amount of debt requested for payback
  • the last payment made on this debt
  • what you can do to dispute this information

This is the only information you should ask them for, and keep a record of what they say. 

 

4. Get the debt information in writing.

Whenever you talk to a debt collector, ask them to provide you with the information you asked them over the phone in writing.

If they don't provide you with the information on the phone, they must submit it in writing in five days. 

Send a written request for this information as well, so there is the documentation for you. This information that is given on paper can help you verify if the debt is yours or if you need to dispute the claim. 

 

5. Dispute a claim if it is not your debt.

If a debt collector is calling you about a debt that is not yours, you need to dispute the claim, so your credit score is not impacted so the collectors stop calling you. Simply ignoring the claim request will not make it go away. You have to take action and dispute the claim. 

In the information you requested over the phone and in writing, there should be information on how to dispute the claim. You usually must send a written dispute within 30 days of being contacted.

When you send in a dispute, the collector legally has to stop communication and collection efforts until they can provide proof that the debt is yours. 

 

6. Settle or negotiate.

If the debt the collection agency calls upon is your debt, you will have to pay this. Not paying can impact your score and lead to more issues. There are two options when paying off your debt. You can settle your debt (pay in full) or negotiate the payment amount. 

Always start with negotiation. If they say no, you settle your payments, but if they say yes, you can end up paying less on your debts. Ask if they will be okay with settling for part of your debt upfront. Some collectors will be okay with this. If they don't agree, make a payment plan to pay your debts. 

Always get whatever settlement or negotiation you decide upon in writing before you start with payments. You will want to confirm this is agreed upon and that no changes were made in your conversation. 

 

7. Know your rights.

Always know your rights when you are dealing with a debt collection agency.

The Fair Debt Collection Practices Act (FDCPA) protects you from unlawful attempts to collect your debts. 

 

8. Debt's Statute of Limitations.

It is important to know about your debt's statute of limitations and why it is equally important to never admit a debt. Debt collectors and the creditor cannot sue you for debt that has reached its shelf life. Each state has different lengths and types of debt, so know what that law is.

If you are called about a debt, and it has reached its shelf life, but you admit that debt, this can rest the clock, and you will have to pay back that debt. 

Rules for contacting.

There are rules that debt collection agencies must follow when contacting you. First, they can only call you between 8 a.m. and 9 p.m. Collectors cannot call you at work either. 

Cannot lie or harass you.

When a debt collector calls you, they cannot lie or harass you. You can report them to the Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB) if they do.

They cannot threaten you and say they will make you pay more than you owe or say anything about going to jail or being arrested. In some states, wage garnishment could be legal, but there is a process that requires going to court. If they threaten you with this and there is no legal action, this is a lie and harassment. 

Must provide debt information.

Debt collectors have to tell you information about the debt they are calling about. You have the right to ask how much you owe, who the debt was owed to, and how you can dispute it. Always get this information in writing as well. 

 

 

Collections Agencies: Beware of Scams

Sadly, there are many scams around debt collection agencies. It's important to know how to identify a scam. The rights you have around debt collection can help you understand if something is a scam. 

If a collector calls you outside the 8 a.m. to 9 p.m. hours, they are probably a scam. If you ask the collector for information about where they work, like the company name, callback number, and address, and they do not give you this information, this is a scam.

The same goes if they cannot provide information about your debt. They should be able to tell you this over the phone or in writing within five days. If a collector says they are also a police officer, this is a scam. Collectors do not have the authority to arrest you. 

Report any scams to the Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB).

Photo by Andrea Piacquadio

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