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 lettersthat 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:
- Learnabout the debt
- Planfor making a realistic repayment or settlement
- Negotiatea realistic agreement with the debt collector
Be wary of companies that charge moneyin advance to settle your debts for you. Some debt settlement companies promise more than they deliver.
Learn more about negotiating a repayment agreementthat’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 collectorwill 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 lawsuitto 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
Need help with something else?
If you are having an issue with debt collection, you can submit a complaint onlineor by calling (855) 411-CFPB (2372). We’ll work to get you a response from the company.
FAQs
The “777 Rule” states that debt collectors may attempt to contact a consumer about a single debt up to seven times in seven days. Phone numbers do not matter; it's the number of debts that matters.
What is the CFPB final debt collection rule? ›
The final rule, among other things, clarifies the information that a debt collector must provide to a consumer at the outset of debt collection communications and provides a model notice containing such information, prohibits debt collectors from bringing or threatening to bring a legal action against a consumer to ...
What is the 11 word phrase to stop debt collectors? ›
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
What is the 7 7 7 rule for collections? ›
Collectors are permitted to place a call to the consumer about a particular debt seven (7) times within a period of seven (7) consecutive days, so long as no contact is made with the consumer in any of the attempts. The seven days are rolling and do not reset with the start of the calendar week.
What are 2 things that debt collectors are not allowed to do? ›
Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take. They also cannot make repeated calls over a short period to annoy or harass you.
What not to tell a debt collector? ›
Don't provide personal or sensitive financial information
Never give out or confirm personal or sensitive financial information – such as your bank account, credit card, or full Social Security number – unless you know the company or person you are talking with is a real debt collector.
What's the worst a debt collector can do? ›
The worst thing they can do
If you fail to pay it off, the collection agency could file a suit. If you were to fail to show up for your court date, the debt collector could get a summary judgment. If you make an appearance, the collector might still get a judgment.
What is the new debt collection rule? ›
The FDCPA and Regulation F set forth broad prohibitions on using unfair, unconscionable, false, deceptive, misleading, harassing, abusive or oppressive practices or means to collect a consumer debt.
What is the CFPB 3 day rule? ›
Pre-consummation or account opening waiting period.
A creditor must furnish § 1026.32 disclosures at least three business days prior to consummation for a closed-end, high-cost mortgage and at least three business days prior to account opening for an open-end, high-cost mortgage.
How to outsmart a debt collector? ›
You can outsmart debt collectors by following these tips:
- Keep a record of all communication with debt collectors.
- Send a Debt Validation Letter and force them to verify your debt.
- Write a cease and desist letter.
- Explain the debt is not legitimate.
- Review your credit reports.
- Explain that you cannot afford to pay.
What is the 609 loophole? A 609 dispute letter is a written request to credit bureaus to remove inaccurate items from your credit report under section 609 of the Fair Credit Reporting Act (FCRA).
What is the 80 20 rule in collections? ›
FAQ on Credit Control: Prioritising Collections
The trick is to know how to plan invoice collection. Use the Pareto Principle (80-20 rule); that is, often 20% of your customers will account for 80% of the overall money owed to you.
What is the new FCRA law passed in 2024? ›
Fair Credit Reporting Act File Disclosure: The maximum charge to a consumer under the FCRA for file disclosure increases effective January 1, 2024, to $15.50 from $14.50. See 88 Fed.
How long before a debt becomes uncollectible? ›
The statute of limitations on debt in California is four years, as stated in the state's Code of Civil Procedure § 337, with the clock starting to tick as soon as you miss a payment.
Can you dispute a debt if it was sold to a collection agency? ›
Can you dispute a debt if it was sold to a collection agency? Your rights are the same as if you were dealing with the original creditor. If you do not believe you should pay the debt, for example, if a debt is stature barred or prescribed, then you can dispute the debt.
How can I scare off debt collectors? ›
9 Ways to Turn the Tables on Debt Collectors
- Don't Wait for Them to Call. Consider picking up the phone and calling the debt collector yourself. ...
- Check Them Out. ...
- Dump it Back in Their Lap. ...
- Stick to Business. ...
- Show Them the Money. ...
- Ask to Speak to a Supervisor. ...
- Call Their Bluff. ...
- Tell Them to Take a Hike.
