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Disputing Collections

Are you experiencing a loss of income, a job loss or disability or a recent separation or divorce? Maybe you just lost a loved one, a job or another source of income? Perhaps a family member has been ill and medical bills are piling up. Whatever the reason for your current financial situation, sometimes paying our debts is just not possible. Don’t worry, you can fight back against abusive creditors and harassing debt collectors.

When life knocks us down, that’s when collection calls and letters can be the most disturbing. When those debt collection communications come in, the only way to protect yourself and keep your sanity is to understand your rights under laws such as the Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA), and other federal credit laws and state debt collection statutes.

Learn as much as you can about these laws and your rights so you are better prepared to deal with collection situations as they come up. Some bill collectors can be particularly nasty, underhanded, and persistent but don’t be intimidated! Protect yourself by learning your rights and by reporting violations.

Tips for dealing with creditors

When you experience a loss of income and cannot meet your monthly payments you need to know your rights so you can stop collection harassment. There are many federal and state laws that offer protection from creditors and collectors who use unfair, unethical and even illegal tactics collection tactics.

Your creditors want to hear from you before you become delinquent on your bills. Creditors are more willing to work with you if they know your situation ahead of time. If your bills are already late, and you are still asking yourself when you should contact your creditors, it may be too late and they may have already turned your account over to collections. There may be advantages to contacting your creditors early in the delinquency process. Early intervention may get your creditor to:

  • Eliminate late charges on your account
  • Not report your delinquency to credit reporting agencies.
  • Permit you to make interest-only payments for awhile
  • Prevent your services from being cut off
  • Not turn your account over to a collection agency
  • Defer payments to the end of your contract

Before contacting your creditors, know what you can and cannot afford to do. Try to figure out a solution that you can live with and will make them happy prior to calling. Only promise to pay what you can afford by asking yourself these questions:

  • How much take home income can I count on?
  • What are my current fixed payments (mortgage, rent, auto loans, etc.)?
  • What are my current flexible expenses (food, clothing, fun, etc.)?
  • Will I have additional income in the future?

Disputing debt collections

To best protect your rights under the FDCPA, you must place debt collection accounts in “disputed status” as soon as bill collectors or debt collection agencies contact you about debts that you believe are invalid, inaccurate or don’t belong to you! Use the information on this site and free debt dispute letters to deal with unfair and illegal collection tactics. Put bill collectors on notice that you know your rights and will use them to stop illegal harassment and abuse.

Disputing debts is mandatory whenever you believe the debt to be invalid. For example, dispute the debt and the dunning notice if:

  • you do not believe the debt is yours.
  • the amount collectors claim you owe is incorrect,
  • you’ve already paid the debt off,
  • the debt statute of limitations to enforce the debt has expired,
  • and other reason you have.

The FDCPA gives you the right to dispute debts and even inform collectors that you refuse to pay a debt. BUT, you must dispute in writing in some circumstances. Use the free disputing collection letters on this site or draft your own to send your initial dispute of a consumer debt to collection agencies.
Keep accurate records of all correspondence, including copies of debt collection and letters along with your dispute letters. It’s vital to keep everything, even the envelopes that dunning letters arrive in. If possible, tape record all collection phone calls but ALWAYS inform the caller that you’re taping the call and keep messages left on answering machines too.

Prepare for collection calls, and document them well

Prior to contacting your creditors by phone it may be helpful to first write down what you intend to say. This can help defuse the emotion, and make it easier to talk with them. Be honest and courteous, and never promise one creditor money that you already agreed to pay another. Also, keep a copy of your payment plan by the phone will help keep you strong when creditors unexpectedly call. Our sample debt collection response letters and stop collection calls scripts, including this free sample creditor phone script, may help as well.

Take good notes when you call, of including the name of the people you speak with, the date and time you talked with them, and what you discussed. This free sample creditor phone log may help you track your conversations. And always follow up all phone calls with a letter, keeping a copy for yourself. A follow-up letter helps confirm and clarify what was agreed upon, shows you really want to resolve the problem, and gives you and your creditors a record of what was said. You can use this free sample creditor confirmation letter if you make a satisfaction arrangement.

If have fallen behind on your bills and just need any help you can get, don’t panic—you may have several good options available to you. Your success starts by assessing your current situation with a free debt help analysis.

If they continue to call

The FDCPA requires collectors, upon receipt of your written dispute, to stop all collection efforts and to cease all contact with you until they comply with section G on validation of debts.

Bill collectors who continue to demand payment without validating the debt can be sued for violating the FDCPA. Still keep in mind that until they receive your written dispute they can continue their collection activities. Also, if you fail to respond within the 30 day limitation period they longer have to provide validation. The FDCPA also requires collectors cease all contact upon receipt of your written stop calling letter. Any contact after receiving your stop calling letter CANNOT include a “demand for payment.”

To prove debt collectors have violated the FDCPA you’ll need accurate records. Keep all written correspondence including envelopes and mail receipts. Record all phone calls BUT TELL the caller you are taping the call. The submit all evidence for a free case review.

Collectors calling the wrong party

The FDCPA requires bill collectors to make sure they have the right person and that they are collecting the legal amount of money. Collectors have the right to try and locate debtors and this sometimes results in calls to the wrong person because of inaccurate information and record-keeping. Although contacting the wrong person is not a violation of the FDCPA, continuing to call that same person after being informed they have the wrong person is a serious violation. Just as serious is calling and using harassing and abusive tactics especially when the debtor disputes the debt.

Stop bill collection efforts using the debt statute of limitations (SoL)

Most debts expire! That’s right, almost all debts eventually expire. Put another way, the legal time limit for enforcing the collection of a debt can expire. It’s called the statute of limitations and every state has its own SOL rules. Most unsecured debts four to six years after going into default, but some debts like certain federal student loans and federal and state taxes may never expire. Similarly, judgments may have a statute of limitations as long as 20 years and, and in some states overdue child support never expires.

If you’ve been contacted about an old debt, AND you’re sure it’s yours, then you need to decide whether to pay the debt or not. Although there are many moral, personal and legal issues to consider before making a decision, one thing you should always verify is whether or not the statutes of limitations for enforcing the debt has expired. Doing so allows you to make an informed decision.

IMPORTANT: Bill collectors are usually able to validate debts fairly quickly on delinquent accounts less than a few years old. However, as the debt ages it becomes harder to validate because the original creditor may have deleted some accounts or the records have been lost or misplaced due to the business being sold or it went out of business. Another reason is debts are sold on the junk debt circuit so many times, the original creditor information may have been lost along the way.

When collectors cannot validate a debt, they often sell the debt to another junk debt buyer. Because the FDCPA does not require collectors to tell you when they sell your account and the law prohibits collectors from sharing your information with other collectors, you can expect to be contacted by a different collection agency! When this happens, expect to use the SOL to dispute the debt all over again.

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