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How to Deal with Debt Collectors in 3 Steps
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How to Handle Debt Collectors in just 3 Steps
Don’t rush into paying. Make sure you are aware of your debt and your rights.
By Sean Pyles Senior Writer | Personal financial, credit, and personal finance Sean Pyles leads podcasting at NerdWallet as the producer and host of the NerdWallet’s “Smart Money” podcast. On “Smart Money,” Sean talks with Nerds from NerdWallet’s NerdWallet Content team to answer listeners’ questions about personal finance. With a focus on shrewd and practical advice on money, Sean provides real-world guidance to help people improve the financial situation of their lives. In addition to answering listeners’ financial concerns on “Smart Money,” Sean also interviews guests who are not part of NerdWallet and produces special segments on topics such as the racial wealth gap and how to begin investing and the background of college loans.
Before Sean was the host of podcasting for NerdWallet He also covered issues related to consumer debt. His writing has been featured throughout the media including USA Today, The New York Times as well as other publications. When he’s not writing about personal finance, Sean can be found working in his garden, taking walks, or taking his dog for long walks. He lives in Ocean Shores, Washington.
Apr 7, 2022
Editor: Kathy Hinson Lead Assigning Editor Personal finances, credit scoring managing money and debt Kathy Hinson leads the core personal finance team at NerdWallet. Previously, she spent 18 years working at The Oregonian in Portland in roles including copy desk chief and team director of design and editing. Prior experience includes editing copy and news for many Southern California newspapers, including the Los Angeles Times. She graduated with a bachelor’s in mass communication and journalism in The University of Iowa.
The majority or all of the products featured here are provided by our partners who compensate us. This impacts the types of products we write about and the location and manner in which the product is displayed on the page. However, this does not influence our evaluations. Our opinions are entirely our own. Here is a list of and .
The debt collection agency is trying to hound you for payment on a consumer debt you owe. These tactics can be irritating at best. They can also be in some cases, even illegal, in the worst case.
It’s crucial to know how to handle debt collectors, including understandingto assert your rights and choose the best way to . Before you make any statements or make any payment, follow these steps:
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Three steps to handle a debt collector
1. Do not succumb to pressure to pay on the very first meeting
Just as you wouldn’t jump into a contract without fully understanding its terms, don’t rush to pay when a debt collector calls you. It is important to take the time to analyze your .
“A lot of people are ashamed of having their debt and that’s exactly what debt collectors are after,” says Ramon Khan an ex-debt collector in Texas who is now working in the field of online marketing.
“They create that sense of urgency and exploit those pressure points to get you to pay for something. At the end of the day, if are owed $50,000 or $100,000, they won’t want to pay it all. If they can get you to pay some of it, that still contributes to their limit of.”
Don’t make a payment, don’t pledge to pay and don’t give any payment information that the collector could use in the future. Request information about the debt and say you’ll be in touch to discuss it later.
Making one paymentas little as $5 or $10 — is an acknowledgement of the debt and can result in serious repercussions. If the debt is past the due date, for example, making a payment will reset the clock, which could lead to a lawsuit or .
Readers also ask
Do you have the right to go to jail for not paying back the payday loan?
Inability to pay back the loan is not considered a criminal offense. In fact, it is for lenders to threaten the borrower with arrest or jail. However, some payday lenders have had success making use of bad-check laws to bring criminal cases against their customers, and judges mistakenly stamping the lawsuits.
What happens if you ignore the demands of a debt collector?
The failure to pay a debt could put your salary and bank account, as well as your property at risk. Worse, you can also lose the ability to dispute the debt.
What can I do to dispute a debt?
You have two tools that you can utilize to contest a debt first, the collector of the debt must provide you with a letter outlining the debt and your rights around disputing it. Then, you can request the debt verification letter. You can write a request for more information and to temporarily stop collection efforts.
2. Gather the facts
When the original creditor sells a debt to a third partythat could later resell the debt and on and onrecording of the transaction often falls to the wayside. Many sold debts are erroneous regarding the amount due or who is owed the debt.
Debt collection practices are among of the main causes of consumer complaints that are referred to Consumer Financial Protection Bureau as because of. Around 70,000 complaints were filed in 2021 about the subject and the main reason was consumers being asked to pay off debts they didn’t owe  Consumer Financial Protection Bureau . . Accessed April 7, 2022.
Ask for a letter contact from the collector of your debt if you don’t get one within five business days of first contact. The document should provide information on the amount owed, the collection company and how to challenge the debt.
Gather your own records on the debt If it’s yours including information on the original creditor and your payment history.
Keep accurate records of your communications to the collector and any payments previously made. You may want to use certified mail to ensure the highest quality of documentation.
Find your debt in a simple way
Join NerdWallet to view your current payment schedule and breakdown of your debt all in one place.
3. Be aware of your rights and how to make use of them
This is your friend. This law outlines your rights as a consumer , and defends you against unfair collection methods. For instance:
Communication: You are able to specify what and when you can contact you and request to stop all communication. Debt collectors are not allowed to using profane language or threatening violence.
Honesty: Debt collectors cannot mislead you about the identity of their representatives, the much debt you have or the legal consequences of not paying your debt — for instance threat of arrest.
The debt is disputed The debtor has the right to dispute the debt. If you contest the debt within 30 days of first contact, the collector will not be able to ask for money until you have made sure the issue is settled. After 30 days you can still contest the debt, but the collector can seek payment during the time the dispute is being examined.
You could be protected if the protections under the FDCPA were violated. The state you live in may provide additional consumer protections. Check with legal aid in your region or with your department of the state attorney general.
Understand your federal and state protections in the debt collection process. Your state’s and the are excellent resources.
If you’re sending a letter to debt collectors to inquire about more details on the debt or demanding that the debt collector stop contact, you should know how to use your rights as a consumer — and don’t be afraid to assert them.
Author bios: Sean Pyles is the executive producer and host of NerdWallet’s Smart Money podcast. His work has appeared in The New York Times, USA Today and elsewhere.
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