Receiving a call from a debt collector can feel overwhelming — or even frightening. But with the right approach, you can handle these calls calmly, protect your rights and work toward resolving your debt. Here’s how to start taking control of the situation, step by step.
Stay Calm and Gather Information
The first step when a debt collector calls is to keep your cool. Reacting emotionally can lead to impulsive decisions, so take a moment to collect yourself. Politely ask for detailed information about the debt, including:
- The name of the creditor.
- The original amount owed.
- Any additional fees or interest accrued.
Note the date, time and details of the conversation for your records, including the name of the representative you speak with. Remember, this call is your opportunity to gather facts, not just be put on the hot seat.
Validate the Debt
Debt collectors are legally required to provide proof that the debt is valid and that they are authorized to collect it. If you’re unsure about the debt or don’t recognize it, ask the collector to send written verification. Under the Fair Debt Collection Practices Act (FDCPA), they must provide this documentation within five days of contacting you. Reviewing this information will help you confirm whether the debt is legitimate and ensure there are no errors in the amount claimed. If you believe the debt is incorrect or not yours, you have 30 days to dispute it in writing after receiving validation. Once the debt collector receives your written dispute, they must cease collection efforts until they send either verification of the debt or a copy of a judgment.
Know Your Rights
Understanding your rights can empower you in conversations with debt collectors. They cannot harass you, threaten legal action they don’t intend to take or contact you at inconvenient times (before 8 a.m. or after 9 p.m.) unless you agree. You also have the right to request they stop calling you by sending a written “cease and desist” letter. However, this doesn’t erase the debt; it simply requires that, from that point on, they communicate with you only to verify there will be no future contact or to inform you that they, or the creditor, may take other actions — such as filing a lawsuit. And be cautious with third-party companies that promise to eliminate your debt for a fee. Always verify offers before proceeding.
Evaluate Your Options
Once you’ve validated the debt, it’s time to assess your repayment options. Take a realistic look at your budget to determine what you can afford. If the full balance is unmanageable, consider negotiating a payment plan or a reduced settlement amount. Be sure to get any agreements in writing before making a payment to ensure the terms are documented and to help protect yourself from potential disputes.
Avoid Common Pitfalls
When dealing with debt collectors, steer clear of these common mistakes:
- Ignoring the calls. Avoiding the situation won’t make it go away and could lead to legal action.
- Agreeing to terms you can’t afford. Only commit to repayment plans that fit within your budget to avoid further financial strain.
- Sharing your personal information. Always be very cautious about sharing sensitive information like your Social Security number or bank account details.
- Restarting the clock. Some debts are too old to be legally enforced. If you’re unsure, check the statute of limitations in your state before making a payment, as even a small payment can restart the clock.
Take Charge of Your Financial Future
Dealing with debt collectors can be stressful, but it’s also an opportunity to take greater control of your finances. By staying informed, understanding your rights and working toward a resolution, you can move past this challenge with confidence. Need help navigating debt collection? Speak with a Financial Professional, lawyer or nonprofit credit counselor. You don’t have to handle this alone.
Sources
https://consumer.ftc.gov/articles/debt-collection-faqs
https://www.ncoa.org/article/should-i-answer-debt-collector-calls/
https://www.bankrate.com/personal-finance/debt/reset-old-debt/#long
https://www.consumerfinance.gov/rules-policy/regulations/1006/34/#c-2-vi