How to Fight Debt Collectors

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List of Credit Card Debt This guide is designed to equip you with the information you need to fight debt collectors attempting to collect personal, family, and household debts. This does not cover business debts.

Debt collectors buy old debts from companies or lenders for pennies on the dollar. For them, it’s a business transaction. They are doing whatever they can to get you to pay the debt. They’re facing increased regulation because many have used intimidation tactics such as yelling and insulting their targets. They’ve often blatantly lied or otherwise deceived their targets. They’re often run into cases of mistaken identity and continue to harass the wrong parties. Many debt collectors are not nice people because they operate in an environment where they are often treated in the same way, though that shouldn’t excuse their behavior.

The number one rule in this fight is that the informed consumer is one that stands the best chance of getting things resolved quickly. Debt collectors like picking the low hanging fruit and will use whatever shortcuts they can to get the job done.

Keep Everything

Before getting into what you should do, one bit of advice that is universally given in is that you should collect every piece of correspondence you receive. You should also keep written notes of phone calls, or record them if you have the capability (check to see what level of disclosure you need to provide in your state), in the event you need that information later. Many of the things you do will depend on dates, so keeping a written record of the date and time of the call is crucial. When you send the collector written correspondence, send it certified mail so you have record of when it is sent.

Step 1. Be Informed of Your Rights

Read the FTC’s brochure on your rights and contact your state’s Attorney General for more information about your state’s debt collection laws. If you’re especially ambitious, read the Fair Debt Collection Practices Act (FDCPA) or summaries of the salient details. Those laws explain what the debt collector can and cannot do, if they violate those laws then you have legal recourse (you can sue) and those documents explain how you go about doing that.

Once you understand what they can and cannot do, you’ll want to keep notes of when they break those rules. For example, they can’t call before 8AM or after 9PM or say you committed a crime. If they do, note it. They can’t say you will be arrested if you don’t pay up, if they say that… write it down (or note when it was said in the recording!). Each of those are chips in your pocket because they’re deceptive practices prohibited by the FDCPA.

Step 2. Wait For The Letter…

Once the debt collector contacts you, they have five days to send you a letter explaining the amount and reason of the debt. Once you receive the letter, look it over. The letter should contain information about your rights to dispute, specifically how you have thirty days to respond. If the letter does not contain information about your rights to dispute, that may be grounds for a lawsuit. You will see a lot of instances where collectors violate the FDCPA, each one is grounds for a lawsuit with a potential gain of $1000 on your part. If push comes to shove, each one is a chip in your pocket because that’s $1000 of profit out of their pocket (if you get to the point when you need an attorney, they can find all of these things by reviewing your notes and saved correspondence).

Either way, you should write a letter, sent certified mail, demanding validation/proof of the debt. This is known as a Debt Validation letter.

Step 3. Write A Debt Validation Letter

Here is the statute that governs debt validation:

FDCPA Section 809. Validation of debts [15 USC 1692g]

(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

In other words, they have to stop contacting you unless they can prove that the debt is yours. This forces the debt collector to prove that:

  • The collection company now owns the debt that once belonged to the original creditor.
  • Proof of how they arrived at the figure they are trying to collect, this should include the original contract you agreed to and any payment history.
  • The original agreement between you and the original creditor.

Here is a great sample Debt Validation letter that you can use.

Step 4. Contact an Attorney

At this point, either the debt collector will have given up or they will start using underhanded tactics to get you to buckle. I would recommend getting a lawyer to assist you, you can find one through the National Association of Consumer Advocates’ Find an Attorney tool. If you reach this point, I recommend you follow the advice of your attorney. 🙂

Additional resources:

(Photo: pumpkinjuice)

{ 14 comments, please add your thoughts now! }

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14 Responses to “How to Fight Debt Collectors”

  1. Matt says:

    Actually, step one is face up if it’s your debt. If you had a credit card bill you skipped out on, and it lead to these calls. Save the lawyers fees and just pay your debts. Yes, sometimes they contact the wrong person, and if that’s the case it’s easier to prove than you think. But 99% of the time, it’s the right person, the right phone number and the right debt.

    • Curt says:

      Obviously, Matt is working for a debt collection agency or owns one.
      Matt, thing happen. I’m sure 99% of the population with debt intended
      to pay off their debt. However, there is that 1% that doesn’t.
      But, back to the point of MOST folks undergo difficult circumstances to where the debt payments are more than they can afford. Hmmm, feed my kids or pay someone more money than I have made this month. Kind of a no brainer Matt.
      Stop being so self righteous, and look beyond your own wallet.

  2. jim says:

    I agree, though 99% is probably a little high of an estimate.

  3. Joseph says:

    Greetings from Debt Control Man in the UK. Allowing for the differences in our laws this advice looks spot on. Some corporations and companies do try every trick they know, and the citizen – has to get informed of the rights they have and the rights of the creditor and debt collector; and the limitations on their behaviour.
    Keeping full record of what takes place is essential. Don’t rely on memory or the records of the creditor or debt collector. Get names, get places, get any licence numbers that are relevant. If anything purports to be court papers insist on the opportunity to check with the court – and that means when the court is open to be contacted.
    Keep up the good work Jim, but don’t be too hard on debtors; they really can have good reasons for a problem developing. And don’t be too kindly to the companies; they have not behaved well in the easy credit period!
    Joseph Harris

  4. Andy says:

    Great post and just a quick note to let you know it was included in the 28th edition of the money hacks carnival, which I hosted this week.

  5. Jake says:

    Does anyone have any information on Columbia Credit Services. I had a credit card in college (huge mistake). I used it to pay off some tuition. The credit limit was 1000 dollars. I took out cash and paid off the last of what I owed for the semester. I graduated and have been trying to climb out of the hole I have dug for myself. My debt was bought by a collections agency who had tried to collect what I owed, which after year or two climbed to over 3000 dollars. They agreed to settle for 1800, and I was on my way to settling. I recently received a letter from Columbia Credit Services stating that they had recently taken ownership of my debt. I was to pay them the sum of 4570 dollars, and if failure to do so would result in legalities. I finally called a representative from the creditor, and he was not very helpful. He was looking at my credit report while speaking to me, and telling me that I was currently differing my student loans which is not true. Also that I had some other minor infractions that were not taken care of. I have been paying the student loans for past eight months since I have gotten a job, and paid off all other infractions on the report he was bringing up. He proceeded to ask me how much I made. I told him. Then he asked how much rent I paid and he implied I was lying that it was way too much. I live in Hunterdon conty in NJ, and if you know the area it is expensive. Regardless he came to conclusion that I could settle for 3514. I told him I wasn’t able to do so, yet was aware I owed money that I did not pay back. He then told me to borrow money from friends or family, and was rude when I said I wouldn’t be willing to ask for money. I was willing to be put on a payment plan if possible. He then proceeded to tell me I had to come up with atleast 1000 dollars to be eligible to make monthly payments. He said the lawyers would not agree to let me make payments without a substantial down payment. I originally spent 1300 dollars on a credit card with a 1000 dollar limit, and now I am being told thta if I don’t come up with the money to pay off legal action will be taken. Can anyone help or advise me of what to do. I would greatly appreciate it. I work hard and am trying to better my credit. HELP? Thanks

    • Nobody says:

      Talking to a debt collector is like talking to a cop. Everything you say can and will be used against you. By discussing the debt, you reset the clock on the statute of limitations. You really screwed yourself by admitting to the debt. You should have just kept your mouth shut. Also, you need to read all the info on this website, and read about pro se litigation. If you are too lazy to do the research, you have no hope. Why the hell do you care about bettering your credit? FICO is a score of how stupidly you are willing to rack up debt and pay zillions in interest. Research the FDCPA and the FCRA and debt defense tactics.

  6. Jake,

    I know we have somewhat more debtor-friendly laws and regulations in the UK, but I cannot imagine this behaviour you report is within American regulations.

    At the top of the page there are links which you should access and check if the debt collectors are acting within both their rights to increase debt in this way, and their rights to harass you. I know it means a bit of reading, but it is worth it.

    Also in the Uk we have a number of charities that will help with advice and representation for debtors – our main one is Citizen’s Advice Bureaux. Do you have anything like that?

    Most of all do not let yourself be bullied. Always ask for written proof of what they say, for reference to the laws and regulations they are acting under, and make use of any rights you have to check their status in regard to any licences that may be required. Here our Office of Fair Trading issues licences to trade in credit, and we have a Financial Ombudsman Service.

    And always make sure you note every conversation with notes, date, time and the name of who is talking their end – it is a good idea to ask their job title as well.

    Write to any licensing authority or phone them for advice. And check if you have anything equivalent to our Customer Protection Regulations.

    Get as many names of these laws regulations and codes as you can and ask if they are complying, or if you have read them point out any failures in what they are doing or saying.

    Goog luck Jake in fighting off these sharks.

    Debt Control Man from the UK

  7. nicole says:

    oh my gosh im in the same sort of trouble and i dont know what to do. i was 19 years old and was makin stupid childish mistakes and i now have 5 maxed out credit cards and i dont know what to do about it, i only make minimum wage and one of the cards was 1,000 dollars. im wondering what kind of actions these companies can take on me… if anyone has advice please get back

  8. shannon says:

    Hi Nicole, how old are you now? the creditors can just sell the debt. they can’t take you to court, have a police come on your door to collect or anything like that. they can only call you or send you letters.

  9. terry says:

    Hope someone can read this. I have baaad credit. Most of it when I was younger. How can I clean up my credit report when something has been sold over and over? How can I pay stuff off and have it removed once it’s paid off? I am now having someone calling me over an account they said was opened in 2006. This is completely false. I would assume it is actually an older one, but I have no idea of the who/what/when of it, and they won’t tell me. I read that I should send them a letter and I will do that. I am mostly concerned about cleaning up my record but have no clue where to start. Most of my stuff is over 5+ years old. What to do?

    • Terry,

      If you are in the UK you can choose to have the matter dealt with entirely by letter. When you get phoned the debt collector may not have your address; you should never volunteer it.

      The debt involved here may not be yours! While I have criticism of debt collectors, and the practice of using them, thre are circumstances where debtors change address to avoid debts. Then the collectors will try to contact everyone with that name in the hope of finding them.

      I imagine in the US too there is provision for requesting contact by letter only. If th collector does not have your address it is probably nothing to do with you.

      Don’t send a letter unless you have received one. If the few facts they offer do not tie up with your own debts then they do not have a call on you. If they have your address it might be an idea to find a law centre that will offer free advice.

      If you are in the UK my book Control Your Debt Crisis might help. I have not yet updated it for the new Lending Code, but I have a lot of information on that in my blog debtcontrolman.

      Good luck on this; takesome deep breaths and read all you can from the many sites that offer good advice on how to make collectors behave within the law, and not outside it.

      Joseph Harris

  10. elizabeth Banks says:

    I am having trouble with a debt collection agency he told me that I had to pay 820.00 dollars and approved me for hardship and told me my payment would be 150.00,i told i could pay 50.00 that was all i could afford now.he said not good enough, then some other guy told me that he wanted my work number and social and bank account number,then said I need to get a lawyer and file bankruptcy. please help me with what i need to do. thanks

  11. Kenneth says:

    You can stick up 4 the banks if you want to but they will get you in the end.

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