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How to Deal With Debt Collectors in just 3 Steps

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How to Deal with Debt Collectors in 3 Easy Steps

Don’t be rushed into payment. Be sure to verify your debt and understand your rights.

By Sean Pyles Senior Writer | Personal finances, debt Sean Pyles leads podcasting at NerdWallet as the host and producer of NerdWallet’s «Smart Money» podcast. In «Smart Money,» Sean talks with Nerds across the NerdWallet Content team to answer listeners’ questions about personal finance. With a focus on thoughtful and practical advice on money, Sean provides real-world guidance to help people improve their financial lives. Beyond answering listeners’ money concerns on «Smart Money» Sean also interviews guests outside of NerdWallet and produces special segments to explore topics such as the racial gap in wealth as well as how to get started investing and the background for student loans.

Before Sean lead podcasting for NerdWallet He also covered issues related to consumer debt. His work has appeared on USA Today, The New York Times and other publications. When Sean isn’t writing about personal finance, Sean can be found digging around his garden, taking runs , and taking his dog on long walks. Sean is located at Ocean Shores, Washington.

7 April 2022

Written by Kathy Hinson Lead Assigning Editor Personal finances, credit scoring debt and money management Kathy Hinson leads the core personal finance team at NerdWallet. Prior to joining NerdWallet, she worked for 18 years at The Oregonian in Portland in roles including copy desk chief and team editor and designer. Her previous experience includes news and copy editing at several Southern California newspapers, including the Los Angeles Times. She earned a bachelor’s degree in mass communication and journalism from the University of Iowa.

The majority or all of the products featured here come from our partners, who pay us. This impacts the types of products we write about and where and how the product is featured on the page. However, this does not affect our assessments. Our views are our own. Here is a list of and .

The debt collection agency is trying to hound you for payment on the consumer debt you owe. tactics can be annoying at best. They can also be in some cases, even illegal, at worst.

It’s essential to learn how to deal with debt collectors, including understandingto assert your rights and decide the most appropriate method of handling them . Before you speak to anyone or make any payments be sure to follow these steps:

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Three steps to handle a debt collector

1. Do not succumb to the pressure to pay at the very first meeting

Just as you wouldn’t jump into an agreement without fully understanding the terms of the contract, don’t be rushed to pay when a debt collector calls you. Make time to consider your .

«A lot of people are ashamed of having their debt and that’s the reason debt collectors are after,» says Ramon Khan, a former debt collection agency from Texas who now works in the field of online marketing.

«They create that sense of urgency and exploit those pressure points to convince you to pay something. In the final analysis, even if have a debt of $10,000 or more, they won’t care that you’re going to pay it all. If they can convince you to pay a portion of it, that still contributes to their limit of.»

Don’t pay, don’t say to pay, and don’t divulge any payment information that the collector may utilize in the future. Ask for information on the debt and say you’ll be in touch to discuss it at a later time.

Making one payment- even just $5 or $10 is an acknowledgment of debt, and could have severe consequences. When the amount owed is past the , for example paying a bill will reset the clock and may cause a lawsuit, or .

Readers can also ask questions.

Do you have the right to go to jail for not paying back the payday loan?

Refusal to pay back the loan is not a crime offense. It is actually illegal the responsibility of a lender to threaten a borrower with arrest or even jail. Nonetheless certain payday lenders have succeeded in using bad-check laws to file criminal complaints against loanees, with judges erroneously rubber-stamping the lawsuits.

What happens if you ignore the debt collector?

Ignoring a over a delinquent debt could put your salary and bank account, as well as your property at risk. Worse, you can also lose the ability to dispute that you owe the debt.

How can I contest the loan?

You have two tools you can use to challenge a debt First, you can request a letter that a collector must send youa letter detailing the debt and your rights around disputing the debt; and secondly, you can request a letter of verification. You can make a written request to get more information and to temporarily stop collection efforts.

2. Find the information you need

When the original creditor sells a debt to a third partywho may then go on to resell the debt or even resell it again -recording of the transaction often falls to the wayside. A lot of sold debts contain errors in the amount of debt or even the person who owes the debt.

Debt collection practices are among of the main causes of complaints by consumers with the Consumer Financial Protection Bureau as because of. Around 70,000 complaints were filed in 2021 on the matter and the main reason was consumers being asked to pay debt they didn’t owe [0] Consumer Financial Protection Bureau . . Accessed on Apr 7, 2022.

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You should request a copy contact from the collector of your debt if you do not receive one within five days after the initial contact. It should include details on the debt, the collection agency and the best way to contest the debt.

Gather your own records on the debt, if it’s yours, including details about the original creditor and your history of payments.

Keep accurate records of your communications between the collection agency, as well as any prior payments. You may want to use certified mail for the best documentation.

Make sure you track your debt in an easy way

Join NerdWallet to see your financial breakdown and future payments all in one place.

3. Know your rights and how to use them

This is your friend. This law provides you with rights as a consumer and protects you from unfair collection methods. For instance:

Communication: You can specify how and when can contact you — and to stop all communication. Debt collectors are not allowed to using profane language or threatening violence.

Honesty: Debt collectors are not able to be deceived regarding the identity of their representatives, how much debt you have or the legal repercussions of not paying your debt — for instance threats of arrest.

Challenging the debt You are entitled to challenge the debt. If you dispute your debt in the first 30 days from the initial contact, the collector cannot ask for payment until the dispute is resolved. After 30 days, you may still challenge the debt, however, the collector may request payment during the time the dispute is being investigated.

You may be able to claim if your rights under the FDCPA are not being respected. Your state may offer extra consumer rights. Consult with the legal aid office in your local area or the state attorney general’s office.

Understand your federal and state safeguards during the collection process. The state’s laws and your own are good resources.

It’s a matter of sending a letter to debt collectors to request more information on the debt, or requesting that a debt collector cease contact, you should know how to assert your rights as a consumer — and don’t be afraid to exercise them.

About the author: Sean Pyles is the executive producer and host of NerdWallet’s Smart Money podcast. His writing has been featured in The New York Times, USA Today and elsewhere.

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