Your Top Debt Collection Questions Answered
Debt collection is consistently one of the top financial issues people have questions about when they visit our website. While every situation is unique, these answers may help you better understand how debt collection works or help you identify steps that you can take to address your own situation.
What should I do when a debt collector contacts me?
There are different ways to respond appropriately to debt collectors. When contacted, find out:
The identity of the debt collector, including name, address, and phone number
The amount of the debt
What the debt is for and when the debt was incurred
The name of the original creditor
Information about whether you or someone else may owe the debt
We also have sample letters that will help if you’re experiencing common problems that may come up with debt collection.
How can I verify whether a debt collector is legitimate?
Ask the caller for their name, company, street address, and telephone number.
If your state licenses debt collectors, you can also ask for a professional license number.
You can also refuse to discuss any debt until you get a written "validation notice."
Do not give personal or financial information to the caller until you have confirmed it is a legitimate debt collector.
Keep an eye out for warning signs that could signal a debt collection scam.
What is the best way to negotiate a settlement with a debt collector?
To get ready to negotiate a settlement or repayment agreement with a debt collector, consider this three-step approach:
Learn about the debt
Plan for making a realistic repayment or settlement
Negotiate a realistic agreement with the debt collector
Be wary of companies that charge money in advance to settle your debts for you. Some debt settlement companies promise more than they deliver.
Learn more about negotiating a repayment agreement that’s right for your situation.
What should I do if a creditor or debt collector sues me?
If you're sued by a debt collector, respond to the lawsuit.
You can respond personally or through an attorney, but you must do so by the date specified in the court papers.
When you respond to, or “answer,” the lawsuit, the debt collector will have to prove to the court that the debt is valid and that you owe the debt.
If you ignore a court action, it's likely that a judgment will be entered against you for the amount the creditor or debt collector claims you owe.
Often the court also will impose additional fees against you to cover collections costs, interest, and attorney fees.
Learn more about what can happen if you don’t respond to a debt collection lawsuit.
What is a statute of limitations on a debt?
A statute of limitations is the limited period creditors or debt collectors must file a lawsuit to recover a past due debt.
Most statutes of limitations fall in the three- to six-year range, although in some cases they may vary due to:
What type of debt you have
Whether the state law applicable is named in your credit agreement
Learn more about statutes of limitations for debts you may owe.
If you are having an issue with debt collection, you can submit a complaint online or by calling the Consumer Financial Protections Bureau at (855) 411-CFPB (2372).
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