Are collection agencies constantly calling your phone day after day? Maybe even from different numbers? Are you receiving harassing collection attempts about a debt you’re not sure you even owe? Are you afraid a collection company will sue you for debt you’re not able to pay?
Take a deep breath and get your readers on, we’re here to help. It’s no secret that debt and collection companies can cause your credit score to plummet, but don’t fret. There are laws they must abide by that should keep them in their lane while you get your finances in order.
1. Validate the Debt
In the simplest form validating a debt means to make sure that it is real, accurate and can be legally collected on.
With so many people in the United States and different types of debt and collection companies, it is possible that they make a mistake … believe it or not. Validating the debt is the first and most important step. Because you could be harassed for an account that doesn’t even belong to you. If you get a call from a collection agency, always ask them to mail you proof of the debt. The proof should contain specific information regarding your account. Because collections agencies buy debts for pennies on the dollar, their main way to make and save money is to get someone to pay the debts.
When you validate a collection account there are specific items they must furnish – the amount of the debt, the payment history, the name on the account and the current balance. If you feel that there has been a mistake, you must notify them in writing within 30 days. Then their job is to provide you with the name and the address of the original creditor.
2. Statute of Limitations
Simply put, the statute of limitations is the period of time which a creditor or collector can collect from a borrower for the amount of money owed. Subsequently, it also represents the amount of time before the unsecured debt will fall off of your personal credit card debt report. The statute of limitations varies by state
Statute of limitations typically fall between 4 to 6 years, but it varies by state. The clock starts after the date that you made your last payment on the debt or collection account. The account should be removed from your credit report once the debt has passed the statute of limitations. You can check your states statute of limitations here.
3. Fair Debt Collections Practices Act
Our favorite. The Fair Debt Collection Practices Act (or FDCPA) was put into place to protect consumers and dictate how and when debt collectors are allowed to contact you.
FDCPA rules state that debt collectors can not:
- Contact you before 8 am or after 9 pm
- Contact you at unusual times or places that are inconvenient
- Harass you by phone, text, email, or any other means
- Contact you after they’ve been made aware that you’re being represented by an attorney
- File or threaten to file a lawsuit after the statute of limitations has expired
The FDCPA is upheld by the Federal Trade Commission of the United States and failure to abide by it is punishable by law. Read the full FDCPA here.