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Understanding Debt Collection

Got debt?  Most of us do!  Debt comes in different shapes and sizes, from credit cards to mortgages.  What happens if you miss or fall behind on payments?  You might find yourself being contacted by a debt collector.  I’m sure most of us have heard a horror story involving a debt collector.  But did you know that there are laws that surround debt collection and YOU have rights under the Fair Debt Collection Practices Act?  To help you understand debt collection and your rights, over the next few weeks I will provide information on what debt collection is, what your rights are, and how to identify scams or fraud.

Today, let’s start by discussing what a debt collector is, why they might contact you, and how to stop them from contacting you.

What is a debt collector?

A debt collector is a lawyer, company, or collection agency that collects debts on a regular basis that are owed to others, generally when they are past due.  Some companies buy past-due debts from a creditor or business and then try to collect them.

Why might a debt collector contact me?

A debt collector might contact you because a creditor thinks you are past due on repayment of a debt.  A debt buyer might contact you because they bought  debt and are now trying to collect that debt.

When and where can debt collectors contact me?

Debt collectors are not allowed to contact you at any time or place.  They are only allowed to try to contact you at convenient times and places unless you agree otherwise. If a debt collector is told, either verbally or in writing, to not contact you at work they may not contact you there.  If you decide that you do not wish for a collector to contact you again you may request in writing for them to stop contacting you.

How do I request a debt collector to stop contacting me?

To request a collector to stop contacting you, you must first write a letter stating that you do not wish for them to contact you any further.  Make a copy of the letter.  Send the original letter via certified letter with return receipt.  The return receipt will be your documentation that the collector received your stop contact request.  Once the letter is received by the collector they are not allowed to contact you any further unless it is to let you know that there will be no further contact or to notify you of a specific action the creditor intends to take.  This letter does not make the debt disappear, but stops the collector from contacting you about this debt.  For sample letters visit: https://www.consumerfinance.gov/ask-cfpb/what-should-i-do-when-a-debt-collector-contacts-me-en-1695/

Check back next week to learn more about debt collection and what to do if you don’t believe you owe the debt.