For some, receiving a debt collection call can cause panic to rise. For others, it can bring on a sense of resignation. For still others, it can create an urge to put their proverbial heads in the sand. While any of these reactions is understandable, none serve a useful purpose. Instead, a practical, reasoned approach will result in a more successful outcome. A good place to start is by asking yourself four questions:
1. Is the debt collector calling the right person? All too often, bill collectors call the wrong person. This could be for any number of reasons. For example, a debt buyer typically purchases charged-off debt for pennies on the dollar, and receives very little information about the consumers who owe the money. Debt collectors may wrongly call people who have the same name, who have a phone number once owned by the person who owes the money, or lives at the same address as the person who owes the money. If the debt collector has a wrong number, tell him so, and begin noting the dates and times of the calls. You could have a case against the debt collection agency if the calls persist.
2. Is the debt mine to pay? There could be a number of reasons why you're not legally responsible for the debt. It could be that the debt is very old, and is past the statute of limitations in your state. If that's the case, the debt collector cannot take you to court in order to get you to pay. It could be that the debt is that of a relative or someone who is recently deceased. With few exceptions (such as if you cosigned for the debt), you're not responsible. If you suspect that debt is yours to pay, ask for a validation notice just to be sure. The debt collector must send you information proving that the debt is valid.
3. What are my options? If the debt is valid, you have a number of options - but doing nothing is never a good option. If you have the money to repay the debt, negotiate a settlement with the debt collector - but get the terms in writing. There is a huge turnover in that industry, so the person you're dealing with this week might be gone next week. In addition, never give a debt collector your bank information or other payment information. Instead, insist on sending money orders via mail. If you don't have the money to repay the debt, say so. If the debt collection agency files suit against you, go to court to defend yourself. If you don't show up, a judge will likely enter a judgment in the debt collection agency's favor, meaning that they could garnish your wages or freeze your bank accounts. If you go to court, chances are that you'll prevail.
4. Do I need an attorney? If you suspect that a debt collector has crossed the line by harassing, threatening, or embarrassing you, consult a fair debt attorney. You may be able to sue the debt collector in court. You shouldn't have to pay attorney fees or court costs, as the Fair Debt Collection Practices Act says that unscrupulous debt collectors have to pay those costs. Also, keep in mind that if you have an attorney, all communication from a debt collector must go through your attorney. In other words, the debt collection calls and letters will stop.
Sergei Lemberg, Esq. is the Principal of Lemberg & Associates, a law firm practicing fair debt collection law, lemon law, and other consumer law.
