Thinking 8 Ways out of your Debt Trouble, or How to Handle Collectors’ Requests

In reality, communication with collectors is a more delicate process than it might seem. There are nuances that you, as a consumer, may not be aware of. Missing those, sometimes, you’re risking falling into the collectors’ trap, for example, paying the debt that you actually don’t owe. This, in turn, stimulates the demand for online debt negotiation software that guarantees the transparency of debt collections for both parties. However, you still need to know your legal rights and even some tricks to become a winner in even the worst situation.

Today, we collected 8 ways to communicate with collectors. We selected the most controversial situations that may appear at some point in the communication, so you can readily use these tips described below if one of the following applies to your case.

Play Over the Collector! 8 Effective Tips to Close your Debt

1. Is There a Validation Notice?

Before the actual moment of the first contact, a collector must send you a written validation notice that specifies the amount owed. If you haven’t received that document yet the collector contacted you, you may not answer their request or say you won’t answer until the notice is sent.

Once you have the notice, within 30 days, you may ask them to verify it, especially if you doubt the specified debt amount is correct. Upon verification, they must provide you with the info on the original creditor and the debt’s age. Unless you have that info, the collector can’t pursue any legal action regarding your debt against you.

2. Have Doubts? Dispute!

Again, you can request verification within 30 days from the moment of receiving the validation notice. However, if you doubt the defined amount of debt or don’t believe you owe it at all, you can dispute it rather than ask for verification. Mind that when you dispute your debt, the collector can’t sue you as well as execute any other legal action against you — until your debt is verified and explicitly confirmed to you. At the time of the dispute, the collector must report to the appropriate credit bureau that the account is disputed.

3. Tired of Collection Reminders? Then Request to Stop Them!

Remember that under any circumstances, you have the right to request the collector to stop contacting you if you wish not to. Under the Fair Debt Collection Practices Act (FDCPA), you can write a cease-and-desist letter confirming that the collector can no longer contact you.

So, what are the circumstances that allow you to write cease and desist? For example, if you feel pressured for a debt that is not actually yours or you think you don’t need to pay. However, you don’t need to explain the reasons to the collector; FDCPA allows you to request them to stop without any explanation. But be aware that in this case, all the collector is left to do is to act legally by suing you in court.

4. Check your Statute of Limitations

Collectors can’t write to you endlessly. They have a specific period of time when they can contact you and initiate legal action against you. In legal terms, this is called the “statute of limitations,” and its duration varies by state.

When the debt is out of that period, the collector can no longer sue you. In this case, you can write the cease and desist letter to put an end to their debt reminders.

5. Nobody’s Canceled Complaints

Sometimes, collectors in their effort to collect the debt may even harass you, which is by no means appropriate. If this is the case, then it’s time to file a complaint. Legally, you can do it through CFPB.

Yet, harassment is not the only cause to file complaints. The collector may mistakenly contact you, confusing you for someone else, or remind you of the debt that you’ve already paid. In both these cases, filing a complaint with CFPB is also a resolution.

6. Your Health Insurance Covers you

Medical bills have the largest share of all debts in the US. Yet, before starting negotiating those with the collector, you need to make sure your insurance covers them. Instead, contact your insurance provider so they can check it.

The coverage issue is particularly important in cases with gap insurance. If you have one, then you also need to check that the entire procedure or at least part of it that wasn’t covered by the primary insurance is covered by the gap. That is, if the insurance covers a medical bill that previously went to collections, the corresponding collection account can be excluded from your credit report, which means you won’t have to wait seven years to have a good credit rating.

7. Go to the Heart of your Debt Issue; Contact the Original Creditor

If at some point you find that the original creditor still owes your debt, there’s no legal obligation for you to talk with the collector. Better, you should not as you can spend time more effectively by contacting the original owner so you could both work out how to settle the debt. This solution works for credit cards, service bills, and medical bills. However, remember that you are not responsible for any payment operations unless the original owner approves it.

8. Enlist Legal Help to Get Ready for the Collector’s Legal Action

If the collector initiates legal action against you, it’s a red alert for you to hire legal counsel. However, you may not afford a lawyer at the moment, but luckily, there are legal aid societies across the US that may provide you with pro bono services.

However, you can countersuit the collector; for example, you can do it in the case of harassment or violation of FDCPA when they are continuing to contact you regardless of the written cease and desist, or the case when they even scare and humiliate you.

You can ignore the collector, but you can’t ignore court orders. If the court summons you to appear, and you don’t, the collector will win the deficiency judgment against you.

The Final Tip: Don’t Hasten to Pay

After considering all these tips we brought in the article, you may think that it’s better and much faster to pay the collector. Sure, you can do it, but before paying, make sure you do it right.

First, check the debt violation letter the collector sent you to make sure they truly own the debt. Next, check your credit records; after all, you might have already paid the debt, just forgot about it. Only then you should consider your current budget to assess if you can afford to pay the debt in full (if you indeed still owe it), or if you need to pay in installments.

After you deal with all the preparations, it’s time to start negotiating your debt with the collector. However, it’s better to negotiate through writing rather than over the phone since written agreements are a reliable guarantee and proof of your debt obligations rather than verbal deals. In this way, you should receive a signed agreement, and only then can you consider paying. Mind that if the debt is not owed by the collector, it is the original creditor whose obligation is to sign any related agreement.

Remember that closing the debt doesn’t mean it will be immediately removed from your credit report; you still have to wait seven years from the moment of the first delinquency.