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How to Deal with Debt Collectors in just 3 Steps
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How to Deal with Debt Collectors in 3 Steps
Do not be pushed into making a payment. Make sure you are aware of your debt and your rights.
By Sean Pyles Senior Writer | Personal financial and credit, and personal finance Sean Pyles leads podcasting at NerdWallet as the host and producer of the NerdWallet’s “Smart Money” podcast. On “Smart Money,” Sean talks with Nerds on NerdWallet’s NerdWallet Content team to answer listeners’ questions about personal finance. With a focus on thoughtful and practical advice on money, Sean provides real-world guidance that will help consumers improve the financial situation of their lives. Beyond answering listeners’ money questions on “Smart Money,” Sean also interviews guests outside of NerdWallet and creates special segments on topics such as the racial wealth gap, how to start investing and the background of college loans.
Before Sean lead podcasting at NerdWallet the company, he also wrote about topics that dealt with consumer debt. His work has appeared in USA Today, The New York Times and other publications. When when he’s not writing about personal finance, Sean can be found working in his garden, going for runs , and taking his dog on long walks. He is based within Ocean Shores, Washington.
Apr 7, 2022
Edited by Kathy Hinson Lead Assigning Editor Personal financial, credit scoring, financial management and debt Kathy Hinson leads the core personal finance team at NerdWallet. Previously, she spent 18 years with The Oregonian in Portland in capacities such as chief of the copy desk and team director of design and editing. Her previous experience includes editing copy and news for several Southern California newspapers, including the Los Angeles Times. She graduated with a bachelor’s in mass communication and journalism from Iowa’s University of Iowa.
Many or all of the products we feature are from our partners, who pay us. This influences which products we write about and where and how the product appears on the page. However, this does not affect our opinions. Our opinions are entirely our own. Here is a list of and .
The debt collection agency is harassing you, seeking payment on a consumer debt you owe. The tactics are annoying at best. They can also be in some cases, even illegal, in the worst case.
It’s essential to learn how to deal with debt collectors –including understanding — so you can claim your rights and select the best way to . Before you say anything or make any payments make sure you be sure to follow these steps:
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3 steps for dealing with the debt collector
1. Do not succumb to the pressure to pay at the first day of contact
Just as you wouldn’t jump into a contract without 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 large number of people are embarrassed of having their debt and that’s the reason debt collectors are after,” says Ramon Khan who was a debt collection agency from Texas who is now working in online marketing.
“They create that urgency and exploit those pressure points to get you to make a payment. At the end of the day, if are owed $10,000 or more, they really don’t want to be able to pay the entire amount. If they can get you to pay a portion of the amount, it works toward their amount of.”
Don’t pay, don’t say to pay, and don’t divulge any payment information that the collector can make use of in the future. Ask for information on the debt and say you’ll contact them to discuss the issue in the future.
Making a single payment -as little as $5 or $10 is an acknowledgment of the debt and can result in serious consequences. When the amount owed is over the due date, for example, making a payment will reset the clock and may cause a lawsuit, or .
Readers also ask
Are you liable to prison for not paying back a payday loan?
Failure to repay a loan is not a crime act. In fact, it is the responsibility of a lender to threaten the borrower with arrest or even jail. However some payday lenders have had success making use of bad-check laws to file criminal complaints against borrowers, with judges erroneously rubber-stamping the lawsuits.
What happens if you ignore the debt collector?
In the event of ignoring a delinquent debt can put your earnings, bank account or property at risk. In addition, you could lose the ability to challenge the debt.
How can I contest the debt?
There are two options you can use to challenge a debt: first, a the collector of the debt must send you, outlining the debt and your rights in disputing the debt; and secondly, a debt verification letter. You can make a written request to get more information and to temporarily stop collection efforts.
2. Gather the facts
If the creditor who originally sold the debt to a third-party — which might be able to sell the debt in the future, and so on -the recordkeeping process often falls to the sidelines. A lot of sold debts contain errors in the amount of debt or who is owed it.
Debt collection practices are one of the largest sources of consumer complaints with the Consumer Financial Protection Bureau as the result. More than 70,000 complaints were submitted in 2021 on the matter; the biggest reason was consumers being asked to pay debt they didn’t have to pay (zero) Consumer Financial Protection Bureau . . Accessed Apr 7, 2022.
Ask for a letter request for a debt collection letter if the company you are dealing with don’t receive one within 5 business days from the first time you contact. The document should provide information on the debt, the collection agency and the best way to contest the debt.
Make your own notes on the debt in the event that it’s yours including details about the original creditor and your history of payments.
Keep accurate records of your communications with the debt collector and any previous payments. You may want to use certified mail to ensure the highest quality of documentation.
Find your debt in a simple way
Sign up with NerdWallet to view your current payment schedule and breakdown of your debt all in one place.
3. Know your rights and how you can use them
Your ally is. This law provides you with rights as a buyer and defends you against predatory collection tactics. For instance:
Communication: You are able to specify the manner and time when they can reach you — and that they cease communication altogether. Debt collectors are not allowed to making use of profane language or threats to commit violence.
Honesty: Debt collection agencies cannot mislead you about whom they’re from, how much money you owe or the legal consequences of not paying off your debtfor example, by threatening arrest.
Contesting the debt The debtor has the right to dispute the debt. If you challenge your debt in the first 30 days from the initial contact, the collector will not be able to ask for payment until the dispute has been settled. After 30 days, you may still challenge the debt, but the collector can seek payment during the time the dispute is being examined.
You may be able to claim if your rights under the FDCPA are not being respected. Your state might offer additional consumer protections. Contact legal aid in your local area or the department of the state attorney general.
Understand your federal and state safeguards during the collection process. The state’s laws and your own are excellent resources.
If you’re sending an email to debt collectors to request more information on the debt, or requesting that the debt collector stop contact, you should know how to exercise your rights as a consumer as well as not be afraid exercise them.
About the author: Sean Pyles is the executive producer and host of NerdWallet’s Smart Money podcast. His writing has been featured in The New York Times, USA Today and elsewhere.
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