How to Deal With Debt Collectors in 3 Easy Steps

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How to Deal with Debt Collectors in just 3 Steps
Don't be rushed into payment. Make sure you are aware of your debt and your rights.
Written by Sean Pyles Senior Writer | Personal finance and financial debt Sean Pyles leads podcasting at NerdWallet as the host and producer of NerdWallet's "Smart Money" podcast. In "Smart Money," Sean talks with Nerds from NerdWallet's NerdWallet Content team to answer listeners' questions about personal finance. With a focus on shrewd and actionable money advice, Sean provides real-world guidance to help people improve their financial lives. Beyond answering listeners' money concerns on "Smart Money" Sean also interviews guests outside of NerdWallet and creates special segments to explore topics like the racial wealth gap, how to start investing, and the history of college loans.
Before Sean lead podcasting for NerdWallet He also covered issues that dealt with consumer debt. His writing has been featured in USA Today, The New York Times and other publications. When Sean isn't writing about personal finances, Sean can be found playing in the garden, taking runs , and taking his dog for long walks. He is based in Ocean Shores, Washington.





Apr 7, 2022


Editor: Kathy Hinson Lead Assigning Editor Personal finance, credit scoring, financial management and debt Kathy Hinson leads the core personal finance team at NerdWallet. Previously, she spent 18 years working at The Oregonian in Portland in positions such as copy desk chief and team leader for design and editing. Prior experience includes editing copy and news for several Southern California newspapers, including the Los Angeles Times. She received a bachelor's degree in mass communications and journalism at Iowa's University of Iowa.







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A debt collector is trying to hound you, seeking payment on an outstanding consumer debt. These tactics can be irritating at best -- and criminal, or even illegal, in the worst case.
It is essential to understand how to deal with debt collectors --including understanding -to be able to assert your rights and choose the most appropriate method of handling them . Before you say anything or make any payments be sure to be sure to follow these steps:
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3 steps for dealing with a debt collector
1. Do not succumb to pressure to pay on first contact
Just as you wouldn't jump in to a deal without understanding its terms, don't rush to pay whenever a debt collector approaches you. Take time to think through your .
"A majority of people are embarrassed of being in debt and that's the reason debt collectors prey on," says Ramon Khan an ex-debt collector in Texas who now works in online marketing.
"They create that urgency and exploit those pressure points to get you to pay for something. If, at the end of the day you owe the sum of $50,000, $100,000 or even more, they don't really want to be able to pay the entire amount. If they can force you to pay a portion of it, that contributes to their quota."
Don't pay, don't promise to pay and don't give any payment information that the collector can make use of in the future. Request information about the debt and say you'll call back to discuss it at a later time.
Making a single payment -- even just $5 or $10 -- is an acknowledgement of the debt and can have serious repercussions. In the event that the balance is over the date, for instance paying a bill will reset the clock, which could cause a lawsuit, or .
Readers can also ask questions.
Are you liable to prison for not paying back a payday loan?

Inability to pay back a loan is not considered a criminal violation. In fact, it is for a lender to threaten a borrower with arrest or jail. But certain payday lenders have been successful in using bad check laws to bring criminal cases against their customers, and judges wrongly rubber stamping the lawsuits.




What happens if you don't pay a debt collector?

Ignoring a over a delinquent debt puts your wages, bank account or property at risk. In addition, you could lose the right to contest that you owe the debt.




How do I dispute the credit?

You have two tools that you can use to challenge the debt first, the debt collector is required to provide you with a letter with a description of the debt as well as the rights to dispute it; then, the debt verification letter. You can write a request for more information and to temporarily stop collection efforts.








2. Gather the facts
When the original creditor sells a debt to a third party -- which might be able to sell the debt and on and on- recordkeeping often falls by the wayside. Many sold debts have errors regarding the amount due or even who owes it.
Collection practices for debt are one of the main causes of complaints from consumers with the Consumer Financial Protection Bureau as because of. Around 70,000 complaints were filed in 2021 about the subject The main reason for this was the demand from consumers to pay off debts they didn't owe [0] Consumer Financial Protection Bureau . . Accessed Apr 7, 2022.
.
You should request a copy request for a debt collection letter if the company you are dealing with don't receive one within five business days from the first time you contact. It should include details on the amount owed, the collection company and how to challenge the debt.
Make your own notes on the debt, if it's yours, including the information about the original creditor and your record of your payments.
Keep good records of communication between the collection agency and any payments previously made. It is recommended to use certified mail to provide the most accurate evidence.

Find your debt in a simple way
Sign up with NerdWallet to see your debt breakdown and upcoming payments all in one spot.






3. Know your rights and know how to make use of them
The is your ally. This law outlines your rights as a consumer and shields you from the shady collection practices. For instance:
Communication: You can specify what and when you can contact you, and also you can request that they stop communication completely. Debt collectors are prohibited from making use of profane language or threats to commit violence.
Honesty: Debt collectors are not able to lie to you about the identity of their representatives, the much debt you have or the legal consequences for not paying off your debtfor instance, by threatening arrest.
The debt is disputed The debtor has the right to contest the debt. If you dispute your debt in the first 30 days from the initial contact, the debt collector is not able to ask for payment until the dispute has been settled. After 30 days, you may continue to challenge the debt however, the collector may request payment while the dispute is being looked into.

You could be protected if the protections under the FDCPA are not being respected. Your state might offer extra consumer rights. Consult with the legal aid office in your area or your state attorney general's office.
Be aware of your state and federal safeguards during the collection process. The state's laws and your own are good resources.
Whether it's sending a letter to debt collectors to ask for more details about the debt or asking that a debt collector cease contact, know how to assert your consumer rights -- do not be afraid to exercise them.



Author bios: Sean Pyles is the executive producer and host of NerdWallet's Smart Money podcast. His writing has been featured in The New York Times, USA Today and elsewhere.







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