Having a run-in with a debt collector is a little scary! It may feel like they’re intimidating you, but debt collectors usually contact you on behalf of your creditors.
Be aware that a legitimate debt collector can only contact you via email, phone, mail, text, and now, social media. So, it might be wise to think twice before ignoring a DM you receive.
Thus, if you’ve heard from a debt collector and are looking for ways to handle debt collection, read further.
How and when debt collectors can contact you
Debt collectors may only contact you between 8 am and 9 pm. They can’t contact you at your workplace unless you permit them to do so.
They can call you directly, send letters to your residence, text messages, and as of 2021, even contact you on social media. BBC reports that creditors must message you privately. So, they can’t comment under any of your posts that are public and your friends or family would see.
You can opt out of these messages, but collectors don’t need permission to contact you in the first place. There’s no rule as to how many messages they can send you via DM.
There is a rule, however, as to how often they can call you. There is a 7 phone call limit per week per debt. You can request a debt collector to stop contacting you in writing, but this does not make the debt just disappear.
Verify the debt collector
So, you’ve heard from a debt collector. What do you do now? First, figure out if this debt collector is the real deal.
Beware if your debt collector is:
- Withholding information
- Doesn’t provide you with written notice
- Requests a money transfer or prepaid gift cards
- Poses as police
- Threatens to tell other people of your debt
- Asks for personal information
- Calls excessively and at unusual hours
Protecting yourself from potential scammers involves knowing your rights, checking your credit report, contact the creditors, and getting the right information. We’ll go over these points below.
How legitimate debt collectors work
Debt collectors are sent on behalf of creditors after you’ve defaulted or are past due on payments for mortgages, credit cards, medical bills, or auto loans.
These types of debts are covered by the Fair Debt Collection Practices Act (FDCPA). The FDCPA does not cover business debts.
Debt collectors get your information from the original creditor. A debt collector must share information related to debt such as who the original creditor is, the original amount of debt, how much debt you currently owe, and more.
They’re also legally required to send you a mailed letter that details your debt and the debt collector’s information. This is called a debt collection validation notice. The letter includes information about your rights and how you can dispute the debt if needed.
Know your rights
Request information like the company’s name, number, address, information, and look up if they’re legally operating.
Don’t be afraid of debt collectors because they legally can’t lie, harass, or arrest you. They also can’t threaten you with jail time, property liens, or wage garnishment. For any wage garnishment to occur, there has to be a court order.
You can report a potential violation with the Consumer Financial Protection Bureau.
Statute of limitations
Each state has a different statute of limitations for each debt. Typically, it ranges from 3-6 years. Within this time frame, a lawsuit can be filed against you and, in some states, a lawsuit can be filed up to 10 years later. The clock starts ticking at the date of your first missed payment.
Although, be careful with the statute of limitations. Your debt collector can reset the time on your debt if you make a partial payment, agree to make a payment, accept a settlement, or even admit the debt is yours.
Disputing the debt won’t restart the time frame unless you admit it is yours. Always be wary of giving personal details, overexplaining, or claiming ownership of the debt. You should get complete details of the debt information before saying anything.
How to negotiate debt
The CFPB provides sample letters on how to respond to a debt collector. After you’ve collected information on your debt, it’s time to cook up a plan for repayment or settlement if the debt turns out to be yours.
You can settle your debt yourself or hire a firm to do it for you. A firm requires an additional cost, so that may not be the best option if you’re struggling to pay back the debt.
With partial repayment, you should start negotiating low. A debt collector may be persistent that you pay what you owe, but try to pay less if you’re tight on money.
If your debt collector doesn’t budge, lay out how much you can pay every month and review your other bills since you don’t want more debt. You’ll want to explain your plan and your financial situation after meeting with a debt collector. If you have a credit counselor or attorney, it will be beneficial to ask for their assistance.