How to Deal With Debt Collectors: 3-Step Guide

A debt collector is hounding you, seeking payment on a consumer debt you owe. Debt collection tactics can be annoying at best — and predatory, or even illegal, at worst.

Just as you wouldn’t jump into a contract without understanding its terms, don’t rush to make a payment when a debt collector contacts you. Take time to think through your options for paying off a debt in collections.

“A lot of people are ashamed of having their debt, and that’s what debt collectors prey on,” says Ramon Khan, a former debt collector from Texas who now works in online marketing.

“They create that urgency and prey on those pain points to get you to pay something. At the end of the day, if you owe $50,000 or $100,000, they don’t really care that you’re going to pay all of it. If they can get you to pay part of it, that still works toward their quota.”

Don’t pay, don’t promise to pay and don’t give any payment information the collector may use later. Ask for information on the debt and say you’ll call back to discuss it later.

Making a single payment — even just $5 or $10 — is an acknowledgment of the debt and can have serious repercussions. If the debt is past the statute of limitations, for example, making a payment will reset that clock and could lead to a lawsuit or wage garnishment.

When the original creditor sells a debt to a third party — which might go on to resell the debt again, and so on — recordkeeping often falls by the wayside. Many sold debts have errors about the amount owed or even who owes it.

Debt collection practices are one of the largest sources of consumer complaints to the Consumer Financial Protection Bureau as a result. About 70,000 complaints were filed in 2021 on the matter; the biggest reason was consumers being asked to pay debt they didn’t owe^[0]

• Request a validation letter from the debt collector if you don’t receive one within five business days of first contact. It should include details on the debt, the collection company and how to challenge the debt.

• Gather your own records on the debt, if it’s yours, including information on the original creditor and your history of payments.

• Keep good records of communication with the debt collector and any payments previously made. You may want to use certified mail for the best documentation.

• Communication: You can specify how and when debt collectors can contact you — and that they cease communication altogether. Debt collectors are prohibited from using profane language or threatening violence.

• Honesty: Debt collectors cannot mislead you about who they are, how much money you owe or the legal repercussions of not paying your debt — for instance, by threatening arrest.

• Challenging the debt: You have a right to dispute the debt. If you challenge the debt within 30 days of first contact, the collector cannot ask for payment until the dispute is settled. After 30 days you can still challenge the debt, but the collector can seek payment while the dispute is being investigated.

You can file a complaint with the CFPB if your protections under the FDCPA have been violated. Your state may offer additional consumer protections. Check with legal aid in your area or your state attorney general’s office.