When debt collectors come knocking, you need to be ready for them. You can get ready by understanding your rights as a consumer. You have the right to stop harassment by a debt collector and you have the right to dispute the debt they claim you owe. In fact, I recommend that you exercise your right to dispute in almost every situation. It can’t hurt—and it may save you time and money!
Reasons to Dispute a Debt
Debt collectors are not stupid. They have already bought your debt—probably for pennies on the dollar—and their goal is to get their money back and then some. To do this, they will try a variety of sneaky tactics. They may play on your fear by threatening you or on your guilt by shaming you. They may offer you a deal that sounds too good to be true—“You pay us half of what you owe and we will call it good!” Pretty tempting, but don’t fall for it! It is usually worth the effort to dispute the debt. At the very least, it will buy you some time. Best case scenario: you find out you do not owe the debt at all! Our top reasons to dispute a debt:
- If they can’t verify it, you don’t owe! After a debt collector calls you, he has five days to send you a letter telling you how much you owe, the date of the original debt, the name of the original creditor, and what you should do if you think there is a mistake. If any of this information is missing or looks fishy, you have 30 days to dispute it in writing.
- If the debt is old, they can’t collect! Debt collectors are often trying to collect an old debt. If they can’t verify the date or the original debt is more than four years old, they can’t sue you for it. Watch out, though—if you pay even a penny towards old debt, the statute of limitations starts over and it’s open season on suing you for the whole amount.
- It could keep the debt off your credit report. Once you dispute a debt, the debt collector has to cease all collection activity and cannot report it to the credit reporting agencies (CRA). If he has already reported the debt, he must inform the CRA that it is under dispute.
The bottom line is, when you dispute a debt with a debt collector, you are challenging him to prove it. Because this debt may have already passed through several hands and information has been lost along the way, the debt collector often can’t prove it according to the law, and you can get out of it.
If Your Rights Have Been Violated, Call Me!
Debt collectors work in bulk—they have thousands of debts to collect and they are banking on the fact that someone won’t respond and they can sue him. For some people, simply responding to the debt is enough to stop the process. If that’s not working for you, call me and tell me what’s happening. If I can help, I will!
FAQs
The debt collector can't continue its collection efforts against you until it verifies the debt. There is no time limit for the debt collector to respond. For instance, if six months have passed since you requested the verification, the collector can't just resume calling or writing you to demand payment.
What are the three things debt collectors need to prove? ›
Similarly, a debt collector must prove the following facts to win their case in court:
- The debt collection agency owns your debt and has the legal right to sue.
- You owe the debt.
- The amount they claim you owe is accurate.
Requesting Debt Verification
The first step is to request a debt verification letter from the debt collector. Send a written request, preferably via certified mail, asking them to provide proof that you owe the debt.
Do debt validation letters really work? ›
While debt validation requests can be a useful tool, they are not effective at resolving the issue. In most cases, creditors and collection agencies are able to provide the necessary documentation to prove the validity of the debt.
What's the worst a debt collector can do? ›
Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take. They also cannot make repeated calls over a short period to annoy or harass you.
How do you outsmart a debt collector? ›
You can outsmart debt collectors by following these tips:
- Keep a record of all communication with debt collectors.
- Send a Debt Validation Letter and force them to verify your debt.
- Write a cease and desist letter.
- Explain the debt is not legitimate.
- Review your credit reports.
- Explain that you cannot afford to pay.
A debt validation letter is a letter that debt collectors must provide that includes information about the size of your debt, when to pay it, and how to dispute it. A debt collection letter essentially proves you owe the debt collector money.
What happens if you never pay collections? ›
Ignoring these efforts could lead to further financial strain, potential wage garnishment, or the seizure of assets through a court judgment. Additionally, the debt may remain on your credit report for up to seven years, negatively impacting your credit score and future financial opportunities.
What is the burden of proof for debt collectors? ›
§ 34.14 Burden of proof. (1) We have the burden of proving the existence and amount of a debt. (ii) The debt is currently delinquent. (3) You are not delinquent with respect to the debt.
How long does a collection agency have to provide proof of debt? ›
There's no set time limit in which collectors must respond to a debt verification request you send them. However, they're required to send a debt validation letter within five days of first contacting you.
Send the agency a letter by mail asking them to confirm their debt in writing. Search for the company name on the internet, review their website, call their number, etc. Do your homework. If they refuse to answer all of your questions, there's a good chance you're in the middle of a scam.
How to get rid of debt collectors without paying? ›
You can sue the debt collector for violating the FDCPA. If you sue under the FDCPA and win, the debt collector must generally pay your attorney's fees and might also have to pay you damages. If you're having trouble with debt collection, you can submit a complaint with the CFPB.
What to do if the collection agency does not validate debt? ›
- Debt collectors are legally obligated to send you a debt validation letter.
- If you don't receive a debt validation letter, or it lacks detail, you can make a debt verification request.
- You can file a complaint with the Consumer Federal Protection Bureau or the Federal Trade Commission.
How to Request Debt Verification. To request verification, send a letter to the collection agency stating that you dispute the validity of the debt and that you want documentation verifying the debt. Also, request the name and address of the original creditor.
What debt collectors don't want you to know? ›
Debt collectors don't want you to know that you can make them stop calling, they can't do most of what they tell you, payment deadlines are phony, threats are inflated, and they can't find out how much you have in the bank. Furthermore, if you're out of state, they may have no legal recourse to collect.
When debt collectors come knocking, you need to be ready for them. You can get ready by understanding your rights as a consumer. You have the right to stop harassment by a debt collector and you have the right to dispute the debt they claim you owe. In fact, I recommend that you exercise your right to dispute in almost every situation. It can’t hurt—and it may save you time and money!