How to Deal with Debt Collectors

When you owe money that has gone unpaid and overdue for too long, it's not unusual for your debt to be assigned to a debt collector. Once that happens, debt collectors might start contacting you on a regular basis in an effort to get paid.

But dealing with debt collectors can be very stressful. Some debt collectors might use intimidating tactics to try to get you to pay your debts when you can’t afford to. And worse yet, you may get contacted by debt collectors for money you don't even owe.

That’s why it’s so important to know how to deal with debt collectors. Here is what you should know if you’re tired of picking up the phone to find debt collectors on the other end of the line.

Verify that You're Dealing with Legitimate Debt Collectors

When you get a call from a debt collector out of the blue, you may not recognize the name. That's normal, and it doesn't mean it's a scam. But it's important to verify that before you do anything else. 

Once a debt collector contacts you, ask for the company name, mailing address, and phone number. Also ask for the debt collector's license number, and then check it against the National Multistate Licensing System.

Note that not all states mandate licensing for debt collectors. This map from Cornerstone Licensing Services is a good resource for navigating the rules for debt collectors in your state.

Figure Out if You Really Owe the Money

Once you've verified that you're dealing with a legitimate debt collector, your next step is to make sure you really owe the money they say you do. By law, debt collectors are required to provide you with a debt validation letter (also called a debt validation notice) that shows certain information about your debt in writing. Debt validation letters can be sent via mail or e-mail. Information provided on a debt validation letter should include:

• The original creditor you owe money to

• The amount of your debt

• The date you incurred the debt and amounts paid on it so far

• The account number associated with your debt, if applicable

Once you get this information, you have 30 days to dispute the debt in writing if you think the debt collector has made an error. The error could be that they have the amount of the debt wrong, or that you never owed the money in the first place. This written dispute request that you send back to a debt collector is called a debt verification letter. If you send it within 30 days of receiving the initial debt validation letter, the debt collector is required to pause their collection activities until they respond to your questions and show that the debt is legit. 

Know Your Rights as a Consumer

Debt collectors are allowed to try to pressure you to pay your debts, but within reason. The Fair Debt Collection Practices Act (FDCPA) establishes certain guidelines for debt collectors to follow so they don’t overstep. It’s harder for a debt collector to overstep the boundaries if you know your rights as a consumer.

For one thing, debt collectors aren't allowed to call you before 8:00 am or after 9:00 pm. They can't call you more than seven times within a seven-day period. They can’t call you again within seven days after discussing your debt with you by telephone.

Debt collectors also can't:

• Contact you at work if you tell them you're not allowed to get calls there

• Contact you via email or text message if you tell them to stop

• Publicly post about your debt on social media

• Message you privately on social media if you tell them not to

• Threaten to hurt you if you don't pay

• Threaten you with jail time

• Use profane language when discussing your debt

• Lie about the debt you owe

• Say they’re suing you if they really aren’t planning to yet

• Pretend to be law enforcement or a government agency

It's important to keep detailed records of communications with debt collectors. If your rights are violated, don't hesitate to file a complaint with the Consumer Financial Protection Bureau (CFPB).

Try Negotiating if You Can't Pay Your Debts in Full

It may be that you owe the debt. But if you can't pay in full, you could try negotiating with your debt collectors. 

A debt collector may be willing to accept a reduced payment if it means recouping money sooner rather than later. Get any agreement in writing so your debt collector can't accuse you of failing to fulfill your financial obligation in the future.

Seek Outside Help

If you're feeling overwhelmed by the debt collection calls that keep coming your way, or the debt collectors you're dealing with aren't willing to negotiate with you directly, then it may be time to seek outside help. And you have a couple of options.

One option is to contact a professional debt settlement company and let them try to negotiate a settlement on your behalf. Another option is to contact an attorney to discuss your rights and options. An attorney might recommend bankruptcy if they don’t think you’re a candidate for debt settlement. 

You Have Rights in Dealing with Debt Collectors

Knowing how to deal with debt collectors could make a stressful financial situation more manageable. And remember—you don’t have to deal with your debt alone if it’s too overwhelming. There are resources you can turn to, like debt settlement professionals, who can help you take control of your debt so you can move forward.