When dealing with debt collectors, you must realize that they are just doing their job. So if you are contacted by a debt collector, do not lose your calm. ( Reason is that you might give out more information on yourself out of anger) Before you continue , please refer to the Fair Debt Collections Practices Act.
Creditors cannot harass you by ringing your phone off the hook at all hours of the day. They cannot call you at work, if you have told them not to, and / or if your employer does not allow personal such calls. They are not aloud to discuss any account matters with anyone else but you, unless you give them permission otherwise. They cannot threaten you with actions that they cannot legally take. They are bound by the laws of the FDCPA. If they break these laws , then the consumer has the right to bring legal action against the creditors. ( it is recommended that you seek legal services by a qualified lawyer in this field... (See LAWYERS) However you can take them to Small Claims Court, and sue them without one as well, that is totally up to you. This is still the United States of America. Just check your state's rules of Small Claims , and or Civil Procedures. ( You can sue a creditor in your home town, if that is where you have done business with them from, even if they are a major creditor from a different part of the country. They came to you to do business. They cannot garnish your wages unless they take you to court**
You can actually make the bill collector stop calling you. Yes you can do this your self. If you are shocked, maybe you need to go to the FDCPA page on this site before you continue.
You must do this first. Go Pull your free credit reports (see free credit reports) If you haven't already. The website provided is hosted by the three credit agencies themselves. You are entitled to one free credit report per year from each agency. If you pull more than one, they are allowed to charge you for each additional credit report pulled. Unless you apply for credit and are denied and or adverse actions has been taken. Then creditor is supposed to send you a letter stating which agency did they get the report from, and contact information ,so you can get a free report that way. But do not apply for credit just to get a free report. It is better that you have fewer inquiries on your credit report.
Second thing you should do is study your credit reports, ( one at a time ) Look at each account and make sure that they are in fact yours. (If you find fraudulent accounts see identity theft on the resources page) . Assuming that they are yours, you need to need to check each account to see how old they are ( see credit reports page) Also refer to your state's statute of limitations. Determine which debts you want to tackle first.... My opinion is to start small at first, just so yo can get the feel of it. Then work on the larger ones.
Third thing you should do is go to the store and buy some cheap folders, ( one for each account that you have ) Seven accounts Seven folders. Label each folder on the outside for each account. All correspondence , including letters, and or receipts for payments, and everything else that you have received for that account. Now this should bring some order to the mess of papers that sat in the drawer of forgetfulness. ( you know which one, some people it is a shoe box , others it is a drawer)
Fourth thing you must do do is purchase a recording devise that you can plug into a land line telephone. Voice Over I.P. phones are fine. as long as you can record..... Now depending on which state you live in, you must abide by all laws of your state. Most states require you to inform the other party that you are recording. If they are fine with it, be sure to get their name first, and then continue. If they refuse to be recorded , then the conversation ends right then and there. Assuming that they are fine with it , usually the ones that have nothing to hide, or are willing to be professional are fine with it.
You want to be sure that you have a phone attachment with it as well. You can get digital and or analogue. It doesn't matter, as long as you are able to record. Now if you use digital, make sure you transfer all recordings to a compact disc.
1. Ask their name 2. Go ahead and ask them to verify as much info as they can on the account. 3. They will ask you for information regarding you ( the reason is that FDCPA does not allow them to discuss any info about you with anyone else but you).
You must be sure, that the agency that is attempting to collect the debt is actually the owner of said debt. Allot of times collection agencies sell off non collectible debts to other collection agencies. Your unpaid debt could be sold.
4.If you are unsure as to what the status of the account and/or collection agency, you can make them "validate" such debt (see FDCPA). what that means is that , if you are unsure about the collection agency being the legitimate holder of the debt, you must demand in writing "certified letter with return receipt" for them to send you written information of said debt" They must state all information such as principal , interest, date of last payment, original account number, your personal information. Basically you are making prove that they in fact are the party that you owe.
5. Assuming that you are confident that you owe this particular collection agency, then what ever arrangements are agreed upon must be in writing!!!!
6. At this point you have the ability to bargain with them, after all this is a very delinquent account that is probably severely damaging your credit. Usually they will discount the amount 20% to 50% off the amount they state you owe. ( see sample letters). You want to try to settle these debts without breaking the bank doing it. Bargain with the creditor, or collector. Try to get the debt reduced down to the lowest figure. Usually if you have the money for a one time lump some payment, you can usually settle for half. Also bargain for them to agree to delete adverse information from your credit reports in addition to accepting the payment. Get everything in writing before you pay a dime. It is handy to have fax capabilities......
QUICK TIP; Try to get the creditor agree in writing. Usually they just want their money , so they are usually willing to come to an agreement with you.
Now if you are not sure you should pay this debt, you should refer to the Statute of Limitations , and determine your next course of action.
Some debts may be so old, that you may not be required to pay them ( See State Statute of Limitations ). If you find a debt to be too old, according to your state's statute of limitations, you could then send a letter to the collection agency stating that the debt is "non collectible" and they must stop collection activities on said account. ( see sample letters) But be very careful how you read the statute of limitations laws. Each state has different lengths of times ranging from 3-10 years on open accounts ( usually credit card agreements are called "open accounts" or revolving "accounts") In most cases according to research most statute of limitations time starts from the date of last payment on the account, or the last time you used the credit card, which ever is in the creditor's favor. However, in order to sue you in civil court, they must do it within the time provided by the statute of limitations. This also goes for collection activities as well. If you are certain that the statute of limitations ("SOL") is up, then you can submit a letter telling the collector/ collections agency, and or creditor to stop collecting on this debt. Be sure to send the letter United States Postal Service "Certified Letter With Return Receipt" Usually it costs about five dollars and some change. You will then receive a green postcard back in the mail for that letter. Hold on to it. As a matter of fact put in the folder that you have created for that debt.
