Debt Collection: Know Your Rights Before You Pay or Respond

If a debt collector contacts you, you do not have to make a payment during the first phone call. Start by figuring out who is contacting you, what debt they are trying to collect, and whether the debt belongs to you.

The Fair Debt Collection Practices Act, or FDCPA, gives consumers protections when dealing with debt collectors. Federal rules also limit how collectors can communicate with you and what they can say or do, while attempting to collect a debt.

First, Verify the Debt

Debt collectors must provide information that helps you identify the debt, including the creditor's name, the amount owed, and information about your right to dispute it. Compare the collection notice with your own records and credit reports. Do not assume that receiving a collection letter automatically means everything in it is correct.

If you do not recognize the debt, believe you already paid it, or think the amount is wrong, you have the right to dispute it.

Put Your Dispute in Writing

When disputing a debt, always put it in writing and get the document notarized. Keep the original copy of everything you send. And, send it certified mail with a return receipt requested, so you can track when it is received.

A collection validation notice generally gives you 30 days to dispute the debt. A written dispute requires the collector to stop collection of the disputed debt until it provides verification.

Your paper trail matters, in the case that a collector does not respond appropriately and you later need to show what happened or file a complaint.

How Often Can a Debt Collector Call?

Debt collectors cannot repeatedly call simply to pressure or harass you.

Under federal rules, including the Consumer Financial Protection Bureau's Regulation F, a collector is generally presumed to violate the law if it places more than seven telephone calls within seven consecutive days about a particular debt. After speaking with you by telephone about that debt, the collector generally must wait seven days before calling again.

Collectors also cannot threaten violence, lie about what you owe, pretend to be law enforcement, or threaten legal action they cannot or do not intend to take.

Be Careful Before Paying an Old Debt

Before making even a small payment on an old debt, find out how old it is.

Every state has a statute of limitations that determines how long a lawsuit can generally be brought to collect certain debts. Once that period expires, the debt may be considered time barred.

In some states, making a payment or acknowledging an old debt can restart the time available to sue. That is why you should understand the age and legal status of an old debt before agreeing to pay it.

There Are Two Different Clocks

The time a collector may have to sue you and the time a collection can appear on your credit report are not the same thing.

The statute of limitations concerns how long legal action can generally be brought to collect the debt. Those rules depend on state law and the type of debt.

The credit reporting period determines how long negative information can generally appear on your credit report. Most negative information can generally be reported for about seven years.

A debt disappearing from your credit report does not necessarily mean the debt itself no longer exists. Likewise, a debt being too old for a lawsuit does not necessarily mean it immediately disappears from your credit report.

Can You Tell a Collector to Stop Contacting You?

Yes, you can tell a debt collector in writing to stop communicating with you. After receiving the request, the collector generally may contact you only in limited circumstances.

But stopping the calls does not erase the debt or prevent every lawful action the collector may be able to take.

Why This Matters

A collection account deserves your attention, but you do not have to make a financial decision because someone is pressuring you over the phone.

Verify the debt. Put disputes in writing. Keep your records. Be particularly careful with old debts. Understand your rights before you pay or agree to anything.

If you believe a collector has violated your rights, you can file a complaint with the Consumer Financial Protection Bureau.

Sources: Consumer Financial Protection Bureau, Federal Trade Commission, Fair Debt Collection Practices Act, Consumer Financial Protection Bureau Regulation F