What You Need To Know When a Debt Collector Comes Calling

By Michael Peterson
In September 2, 2009

If you have credits cards, chances are you may run into some debt at some point. And if you run up considerable debt, an official debt collector may contact you. Do not be afraid. Debt collectors are not evil, and there are rules that they have to follow. Being aware of those rules can take away some of the uncertainty and tension when it comes to debt collection. In 1977, the Fair Debt Collection Practices Act was passed to ensure that you are treated fairly. But you will want to be prepared in case a debt collector comes knocking at your door.

Just what is a debt collector?

A debt collector is a professional, sometimes an attorney; hired to collect outstanding debts by those owed money. Debts could include personal debts, credit card debts, medical debts, or car or house payments.

What will a debt collector tell me about my debts?
A debt collector will first contact you to inform you that you are being asked to pay off your balance. Then, within the next five days, you will be informed via written notice of the amount you owe, who you owe, and what to do to either pay off the debt or challenge the claim.

What ways might a debt collector contact me?
You may be contacted via phone, fax, email, regular mail, or even in person. However, a debt collector MAY NOT contact you at unreasonably early or late hours (before 8 am or after 9 pm), or while you are at work. Unfortunately, they’ll probably call just as you are sitting down to dinner.

Okay, I get it, my creditor wants their money back. How can I stop a debt collector from repeatedly contacting me, to the point of exasperation?
A debt collector is NOT permitted to harass you. If you feel they are harassing you, submit a written letter to the collection agency asking them to cease. After that, they cannot contact you again except to say they won’t contact you again. However, they may contact you or your attorney if legal action is going to be taken regarding your unpaid debt.

Can a debt collector inform just anyone about my debts?
If you have an attorney, you debt collector may contact them. If you do not, a debt collector is permitted to try to locate you through a third party, but they may not contact that third party more than once. In general, a debt collector is not allowed to go all over town asking about you.

So the debt collector has contacted me, now what?
You have the right to read your credit report in full. Make sure that it is accurate and complete. See our article about understanding your credit report to learn more, If you feel there is a mistake, submit your challenge to the creditor. If they insist there is no mistake, you can request that a statement from you be attached to your file that includes your testimony, so that anyone viewing your credit report will see both sides of the story.

Next, you have to work with the debt collector to start paying off your debt. That is their whole purpose. Your credit report will look much better once you have cleared that negative balance.

What is a debt collector NOT permitted to do?

A debt collector is NOT allowed to threaten you or abuse you in any way. This includes:

  • threats of arrest
  • using abusive language (such as profanity)
  • making your debts publicly known
  • annoying you via phone

A debt collector is also NOT allowed to falsify any information in attempts to collect your debt, such as:

  • faking legal documents
  • conversely, failing to inform you that an actual document is a legal document
  • misrepresenting themselves or who they work for
  • implying that you have broken the law and may be arrested (that’s a threat)

A debt collector CANNOT claim any action that is not legally intended by the people to whom you actually owe the money. Remember, the debt collector represents someone else, it’s not the debt collector you owe. So they cannot make any threats claiming they are going to seize your assets or garnish your wages. Only the creditors can do those things, and even then only if it is legal in your situation.

There are many practices a debt collector cannot do. If anything seems suspicious, check it out. Other examples of sketchy behavior includes:

  • making you pay for collect calls
  • making you pay more than you owe

What do I do if a debt collector is harassing me or violating my rights?
If you feel a debt collector is violating your rights, you may report the violation to your State Attorney General’s Office or the Federal Trade Commission. The Attorney General’s office will investigate your claim to determine if any laws have been violated. If this is the case, you may sue the debt collector for damages, possibly including legal costs.

I had to be contacted by a debt collector due to some bad outstanding debts, and my credit report looks bad. Will this incident haunt me forever?
You are in luck. Every seven years, negative information is cleared from your credit files, so long as the issue has been taken care of. If you have to file for bankruptcy, that information will be erased after ten years.

Do not fear the debt collectors. They are there to remind you that you owe someone some money, and to encourage you to get that balance squared away and get out of debt. Now that you know what to expect if you are contacted, you will be better able to maintain your rights and handle the situation with your rights maintained.

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.

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