Under federal law, debt collectors are banned from making any false, fraudulent, or misleading representations in order to collect a debt. The Fair Debt Collection Practices Act is a federal law that prohibits this (FDCPA).
Statements that are untrue. Debt collectors, for example, may not make misleading claims or imply that:
- Unless the law allows it and they intend to do so, they will garnish or seize your earnings, bank account, or property.
- Threatening to take action that is either not lawful or not meant to be taken.
- Using or sending a written message that purports to be an official document from a court or government agency but is not.
- Using a different firm name than the debt collector’s official name
You have numerous choices if you believe a debt collector has given you incorrect, dishonest, or misleading information:
Is it legal to lie to debt collectors?
Collection agency letters or phone calls can be distressing. They can mention that they’re taking legal action against you or that they’re sending someone to your house. They can’t, however, lie or mislead you about their legal authority or make an excessive number of phone calls. If you do not pay, they may pursue legal action against you.
What should you not say to a debt collector?
It’s also critical to keep track of what you shouldn’t discuss with debt collectors during the collection process. The following are three things you should never tell a debt collector:
Never Give Them Your Personal Information
The agent will request personal information in order to verify your identity and debt ownership.
You are not required to respond to these questions. Instead, request that the agent exclusively communicate with you by email.
Never Admit That The Debt Is Yours
There’s no reason to do this, and it could get you in hot water later if you try to dispute the amount as erroneous on your credit report.
Many old debts have bogus interest charges that you aren’t required to pay, but debt collectors will try to collect nevertheless.
It’s advisable to hang up after telling the collection agent to provide you the information in writing. You have the legal right to do so, and we’ll get to that in a moment.
Never Provide Bank Account Information
While you’re on the phone with a debt collector, they’ll try to persuade you to make a payment, even if it’s a tiny one. To complete the transaction, the agent will need your bank account or credit card details. It may appear to be a simple and quick way to end the call and get off the phone. However, this can lead to a number of serious issues:
- You Lose Leverage: Your payment is your leverage when it comes to dealing with debt collectors in the future. So don’t pay too soon and lose your most valuable bargaining chip. Save it for a time when you can receive something in exchange, such as requesting that the creditor delete unfavorable items from your credit report in exchange for a payment.
- You Share Account Information: The agent may claim that he or she will not keep your bank account or credit card information on file. You, on the other hand, have no way of knowing whether or not this is true. Additionally, debt collectors have charged you more than you committed to pay.
- The Statute of Limitations on the Obligation is Reset: Making a payment resets the statute of limitations on the debt. This provides the creditor additional time to file a lawsuit against you for losses.
It’s fine if you wish to pay off the debt or sign a payment plan, especially if it’s part of a larger debt management strategy. But first, acquire a written agreement.
Do debt collectors have to prove you owe?
If you inquire, debt collectors are required to present proof of a debt. Check to see if you’re aware of your rights under credit collection laws.
Understand What Debts You Owe
When learning how to dispute debt that is not yours, the first thing to remember is to get your facts straight. It’s beneficial if you maintain a close eye on your credit report. When debt collectors start calling, knowing what’s in your credit history can help you figure out if they’ve got the wrong person. You may acquire a free copy of your credit report from each of the credit bureaus once a year, or you can pay for credit monitoring.
Getting Verification of Debts
You can request proof if you’re not sure if a debt is yours, or if the amount or other details about the collection are incorrect. Request a debt validation letter if someone calls you about a debt or sends you a bill without documentation. A debt validation letter must be provided by the collecting creditor within five days of the initial contact.
Entities attempting to recover a debt must present you with specific information, according to the Consumer Financial Protection Bureau. This includes the creditor’s name and the amount owing. A notification of your rights, including the knowledge that you can contest the debt, must also be included by the creditor. The debt validation letter usually includes this information.
Can you threaten a debt collector?
Debt collectors aren’t authorized to threaten, harass, or publicly disgrace you even if you do. You have the option of telling them to cease contacting you.
How long can you legally be chased for a debt?
The statute of limitations is a law that establishes a time restriction for debt collectors to prosecute consumers for unpaid debt. The statute of limitations for debt varies by state and type of obligation, and can last anywhere from three to twenty years. To get you started, here’s a list of each state’s debt statute of limitations – but keep in mind that credit card companies frequently argue in court that the law in their home state (not yours) should apply.
How can I get out of debt collectors without paying?
There are three options for getting rid of collections without paying: 1) Write and submit a Goodwill letter requesting forgiveness, 2) research the Fair Credit Reporting Act and Fair Debt Collection Practices Act and draft dispute letters to oppose the collection, and 3) have a collections removal professional erase it for you.
Collections can stay on your credit record for up to seven years, making it difficult to obtain a car, a home, personal loans, credit cards, or even certain professions. It’s a wise option to do whatever you can to get rid of them as soon as possible.
Do I have to tell a debt collector my income?
When the agreement was finalized, everyone was overjoyed. Mr. A felt glad that his debt had been “processed” in a way that he could afford. Mr A was paying a respectable amount, and the creditor was getting paid.
Mr A is still happy a few years later, and he doesn’t mind paying this for many more years. However, the creditor is now wondering if Mr A will be able to pay more.
This may appear to be unjust; after all, you’ve kept your end of the contract; why should the debt collector want to change it now? This agreement, however, is not a legal long-term contract. Because you were in financial distress, you made a temporary agreement with the creditor to accept less than the original contract stated.
They can’t force you to send them a new Income and Expenditure (I&E) form. If you don’t, they may believe you have more money, in which case they may decide to reintroduce interest or file a CCJ against you.
It’s important to consider what your actual expenses are; if you don’t budget in depth, it’s easy to overlook items. Using an internet tool like National Debtline’s My Budget to generate a comprehensive list. If you like, you may also download the I&E to present your creditor.
What rights do debt collectors have?
Debt collectors do not have any specific legal authority. You may feel compelled to pay more than you can afford, but you are not in any danger. Debt collectors may be employed by your creditor or by a third-party debt collection firm. They’re also known as field agents or doorstep collectors.
Can you tell a debt collector not to call?
The Consumer Financial Protection Bureau (CFPB) has created sample letters that you can use to respond to a debt collector who is attempting to collect a debt. The letters come with instructions on how to utilize them. The sample letters may assist you in obtaining information, establishing boundaries or ceasing further communication, or defending some of your rights. Keep a copy of your letter for your records at all times.
After receiving your letter, a debt collector may not approach you again unless:
- Advise you that it or the creditor may pursue other particular legal actions against you, such as filing a lawsuit.
You have the option of telling the debt collector that you do not feel the debt is yours. If you have proof that the debt isn’t yours, you may want to provide copies of that evidence with the letter.
It’s always a good idea to send the letter certified mail with a return receipt so you can verify that it was received (keep this in your records, too). You can also send the letter via fax; just make a copy of the fax receipt.
A debt collector that uses unfair, dishonest, or abusive tactics to collect debt from you is breaking the law.
Debt collectors should not be ignored. Ignoring or ignoring a debt collector will almost certainly result in the collector contacting you or attempting to collect the debt. You should inform the debt collector if you believe you do not owe the bill or that the debt is not yours. Even though the debt is yours, you have the right to refuse to speak with the debt collector and to urge them to stop calling. However, telling a debt collector to stop contacting you would not prevent the debt collector or creditor from seeking payment from you through other legal means if you owe the bill. They can, for example, initiate a lawsuit against you or report bad information to a credit bureau.
The debt collector may be breaking the law if it continues to contact you after obtaining a formal request to stop, or if it harasses or abuses you.
If you’re encountering problems with debt collection, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) online or by calling (855) 411-CFPB (2372).
What if I don’t think I owe the debt?
A creditor or a collection agency might contact you. Both are referred to as debt collectors.
- A collection agency is a separate corporation that specializes in debt collection.
Even if you don’t have the money or believe you don’t owe anything, debt collectors will try to collect money from you. Depending on whether you owe money to a creditor or a collection agency, your rights may change.
Which bills should I pay first?
If you can’t pay all of your payments at once, you’ll have to prioritize them. Consider what will happen if specific obligations are not paid, and determine which unpaid expenses would have the greatest impact on your household. It’s a good idea to pay your bills in the following order:
1. Health-related bills, such as food, medication, and health insurance.
Rent, mortgage, condo fees, real estate taxes, and utilities such as heat and electricity are all bills that affect your family’s living situation.
3. Other bills: Car payments, child support, income taxes, and government-insured student loans (if you require a car to get to work).
What if I think I don’t owe the debt?
You should not be charged for items you did not purchase or for which you have already paid, but mistakes do happen. If you don’t believe you owe the amount, first determine whether it was billed to you by a creditor or a collection agency.
If you’re dealing with a creditor, you have the right to object to (or challenge) the charge. On the back of your monthly statement, there should be instructions for registering a dispute. It is preferable to send a letter (see Letter A below). Include a copy of your monthly statement with your letter and circle the items on it that you disagree with.
If the debt is with a collection agency, write them a letter stating that you do not owe the obligation. They must refrain from contacting you until you have proof of the debt they claim you owe. Use the letter A in the example below.
If the collection agency sends you proof of the money you owe, but you believe it is incorrect, send them another letter.
You don’t have to do anything if they don’t offer proof that you owe the bill. They must no longer contact you.
Please double-check your data and make the necessary changes to my account. Also, until this situation is resolved, please do not send me any more bills or phone me.
Can debt collectors take your house?
Debt collectors can obtain a court judgment forcing you to sell your home to repay a delinquent debt, which is legal.
Can a debt collector collect after 10 years?
The truth is that nothing prevents a debt collector from contacting you many years after the amount is due. Creditors or collection agencies in Canada, on the other hand, cannot initiate legal action against you if it has been six years or more since you last paid or acknowledged the obligation. This term is significantly shorter in some provinces (such as Ontario, British Columbia, or Alberta), as we’ve said. Many debt collectors will cease contacting once they can no longer threaten you with legal action to compel you to pay them, because their main threat will be gone.
