Have you been contacted by a debt collector recently, and not sure what to do? Your options are to dispute the debt, restrict the activities of the collection agency, or to pay the debt. Read below to expand on these options, and for resources to help you navigate the waters ahead.
Option 1: Dispute the debt.
It doesn’t belong to you. This can happen in cases of mistaken identity or a stolen identity; in either case, you’ll want to get it cleared up as soon as possible. The Consumer Financial Protection Bureau has letter templates you can send to a debt collector that address this situation. If you feel like your identity has been stolen, make sure to notify financial institutions and credit bureaus as well.
You don’t owe this debt. There may be a case of mistaken/stolen identity (as in the first situation), but this might also be an instance in which a vendor and a consumer have a disputed transaction. Perhaps you don’t believe that services were rendered, or extra charges were added to a bill. In any case, make sure the collector records that the debt is disputed (and keep a copy of all correspondence for your records).
Option 2: Establish rules for contacting you.
Specify how & when you can be contacted. If there are certain hours of the day that you cannot (or do not want to) be contacted, you have the right to inform a debt collector of those restrictions. This also goes for methods of contact, like email, phone, text message, etc. If your kids go to bed early, or you have shift work, these are great reasons to restrict when you can be contacted.
I don’t want to be contacted at all. Every individual has the right to not be contacted by a debt collector, but it does not mean that further collection efforts will not be continued. Of note, you may not always want to send a ‘stop contacting me’ letter - this may keep you out of the loop (ie, if your house is going to get foreclosed).
Contact me through a lawyer. This is another option for you to exercise if you feel it’s appropriate. Restricting contact so that it is filtered through a lawyer puts another set of eyes on the collection methods being employed, especially if a company is engaging in unethical or illegal practices.
Send me more information about this debt. If you’re not sure whether you’re financially obligated to pay, or unclear about the debt in any way, ask the collector for more information. As always, keep a record of all correspondence between yourself and the collection agency.
Option 3: Pay the debt.
Perhaps your life has recently been upended, or you’ve had a lot of changes going on and simply forgot about a bill. It’s certainly possible, especially if you’ve moved or changed contact information recently. Should you be contacted by someone about a valid debt that you owe, paying it in full or working out some sort of payment plan is the right thing to do. Not only that, but it can prevent you from being the subject of a lawsuit or having your name sent to credit agencies. Both of these actions can have adverse effects on your personal and financial life, so it’s best to avoid them whenever possible.
When you receive a letter from a collection agency, the experience can be a little intimidating. Remember that you have rights as a consumer, and you have the option to exercise them. Similarly, debt collectors need to comply with legislation and regulations. We hope you found this information useful; check out our blog for more tips from the collections world!