When a debt goes unpaid, creditors often send your outstanding balance to a debt collector. This is a company that purchases debts from creditors and works hard to get you to pay them off. They tend to use scare tactics, they use methods that aren’t always legal, and they’re not usually above intimidation and harassment techniques to get consumers to pay. The Fair Credit Reporting Act provides consumers with rights regarding debt collectors, and those rights protect you when you are being harassed by debt collectors. Knowing your rights makes a difference, and these tips also help when it’s time to handle debt collection efforts.
Ask for Information in Writing
Consumers are allowed to ask for a written letter detailing every aspect of the debt. Collectors have only 5 days to provide this to you following their first call. Never speak to a debt collector without first asking for this information in writing.
Ask for Verification of the Company
Sometimes debt collectors aren’t legitimate companies, and they’ll call to scare you into giving them money. Your job is to ask them for their contact information. Get the name of the company, the phone number of the person to whom you are speaking, and ask to call right back. Hang up and check the validity of the company online. You’d be surprised how many people call posing as debt collectors to scare you into giving up money when they have no actual reason.
Check your own records to validate the debt. Did you have this debt? When was the last time you sent a payment to this creditor? Is the debt real? How old is the debt? Get as much information regarding your debt as you possibly can, and write it all down.
Know the Statute of Limitations In Your State
Every state has a statute of limitations regarding unpaid debts. For example, if you live in a state where the limit is 4 years, you cannot be sued by anyone more than 4 years after the date of the first missed payment on that account. If your accounts are older than the limit in your state, you can rest assured that while collection agencies can call all they want, they can’t sue you if the statute of limitations is up. Additionally, that debt only remains on your credit report for 7 years.
Dispute the Debt
If the debt is an old one, usually more than 7 years, you can dispute it. It should have disappeared from your credit report by now, and that means you can dispute owing it. Most of the time, this works for consumers unwilling to pay a debt this old.
Keep All Call Records
Write down the time, date, number of calls, and to whom you speak each time a debt collector calls you. You are entitled to several considerations, and you want to see if this company is working against those considerations.
Your right as a consumer is to ask your debt collector to stop calling. They are required by law to cease and desist all calls to your phones at home and at work. This means you’re able to ask them in writing to stop calling and the companies are legally bound to do so.
Know the Restrictions
Debt collectors are restricted by the federal law. They may not call between specific hours, they may not use specific language, and they may not repeatedly call. There are many restrictions in place to help those who are being harassed by debt collectors, and getting to know the laws makes it easier for you to determine when a collection agent is breaking the law and treating you unjustly.
Debt collectors mean business, but there is often very little they can do. It’s up to you to know the laws and get to know the procedures and policies surrounding the debts you owe. Once you know your rights and the laws surrounding the Fair Credit Reporting Act, you are able to better understand how to effectively deal with debt collectors and what they mean to your personal finances.