How to deal with a debt collector
How to deal with a debt collector
How to deal with a debt collector
Getting phone calls from a debt collector can be an upsetting, even scary experience. The best way to handle them is to address them head on, and to have all the facts. Here are some tips:
Know all the current details of your debt
Send a debt validation letter within 30 days of the debt collector’s initial contact with you. The debt collector then is required to provide written proof that they are collecting a real debt you actually owe – and one that they are legally able to pursue. The 30-day window is important – you need to make this request in writing during that time. I recommend you send it by certified mail, so you can provide documentation of when you sent the request.
Know your rights
Each state sets a statute of limitations for different types of debt, dictating how long a creditor can sue the debtor to collect the debt. For example, in North Carolina, the statute of limitations are as follows:
North Carolina Statute of Limitations:
Credit Card Debt: 3 years
Medical Debt: 3 years
Auto Loan Debt: 4 years
Mortgage Debt: 10 years
This timeline begins (and restarts) at the last time the debtor engaged with the debt. This can happen when if you admit that you legally owe the debt, or if you make any payment toward the debt. While the law prevents the debt collector from suing a debtor after the statute of limitations elapses, that does not prevent them from calling you, sending threatening letters, and otherwise attempting to collect the debt from you.
Take control of communications
If the debt collector calls you at an inconvenient time, ask them to call you back at a time that works better for you. Send them a cease and desist letter if you would prefer they stop calling you at a certain phone number, or if you would prefer that all of their communications be by mail instead.
When you speak to a debt collector, be calm, direct, and polite. Only after you have received confirmation of their legal right to collect the debt should you acknowledge that you do owe the debt, or engage in discussions of a payment plan. Ask them to send you in writing a summary of what you discuss and agree to.
Durham Tech Community, for more personal finance advice or tips, email me at chapmanl@durhamtech.edu
Larry is the Financial Coach at Durham Tech, providing individual coaching services and information to the students and employees of the Durham Tech community.