If you have a long-standing unpaid credit history then most of the creditors will send your account to a debt collector.
The debt collector will then have the job of pursuing you for payment by calling you and sending letters, sometimes even making an offer to settle on the debt.
Along with these, as a part of their practice, they will list the account on your credit report showing that you have an outstanding debt, which will hurt your credit score and delay your credit repair process.
However, there are ways you can deal with the debt collectors and assert your rights before you say something or pay them anything.
Don’t pay at the first meeting
Don’t rush to make a payment when a debt collector contacts you. Take time to think through your options and take a right step.
A lot of people feel ashamed of having debt and debt collector hunt those pain points and use them their favor by making you pay something.
Stay away from paying at the first contact, don’t promise to pay and don’t give any payment information the collector may use later against you. Ask for information on the debt and make them clear that you will call back to discuss it later after you understand the whole situation.
Gather the Facts
When the original creditor sells a debt to a third party, they may go on to resell the debt again, and so on, it makes difficult to keep the record. Many sold debts have errors about the amount owed or even who owns it. More than 88,000 complaints were filed in 2016; the biggest reason was consumers were asked to pay the debt they didn’t owe.
To avoid this big mistake:
- Request a validation letter (including all the important details) from the debt collector if you don’t receive one within five business days of the first contact.
- Gather your own records on the debt, if it’s yours, including information on the original creditor and your history of payments
- Keep good records of communication with the debt collector and any payments previously made.
Know your Rights and their Uses
The Fair Debt Collection Practices Act provides you the right to question and lead your case. This law outlines your rights as a consumer and shields you from predatory collection tactics. Such as:
- You can specify how and when debt collectors can contact you. Debt collectors are prohibited from using profane language or threatening violence.
- Debt collectors cannot mislead you about who they are and how much money you owe or the legal repercussions of not paying your debt.
- You have a right to dispute the debt. If you challenge the debt within 30 days of the first contact, the collector cannot ask for payment until the dispute is settled.
Regardless of why your debt went into collections, it’s important to deal with the collection notice smartly by following the tips mentioned above.
If you find it overwhelming dealing on your own, you can hire a credit repair expert. A credit repair professional has the experience, knowledge, and contacts to settle or clear your credit report from any type of collection.
RL Kramer is one such credit repair expert and consultant, who is helping people for more than 35 years in the US in repair and improve their credit scores and maintain a healthy financial lifestyle. To start your credit repair journey, call at 406-730-7989 and get a free initial consultation.
Late pays, charge-offs, bankruptcies, liens and more, Richard works on them all!