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. We’ve
provided short, easy-to-understand answers to some of our most-visited questions
about debt collection. For the full answer, you can view the provided link.
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 or not 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:

  1. Learn about the debt
  2. Plan for making a realistic repayment or settlement
  3. 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 of time creditors or debt collectors have to 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:

  • State
    laws
  • 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.

Need help
with something else?

If you are having an issue with debt collection, you
can submit a complaint online or
by calling (855)
411-CFPB (2372). We’ll work to get you a response from the company.

This article by was distributed by the Personal Finance Syndication Network.