This is a guest post by Sergei Lemberg, a consumer attorney.
Many people aren’t surprised when a debt collector calls. After all, they know they owe an overdue debt. But what happens when you’re taken by surprise because you didn’t realize that you owe a debt or had forgotten that you owed money? Bill collectors often spring this kind of surprise on unsuspecting people, and make people so desperate that they end up paying the bill – even when they don’t owe the money in the first place.
That’s why, if a debt collector calls, the first step you should take is to demand validation of the debt. According to the Fair Debt Collection Practices Act, a bill collector must notify you in writing within five days of contacting you via phone. In their letter, they must state the name of the creditor, the amount you owe, and the fact that you have 30 days to dispute the debt. The bottom line is that, when you receive a debt collection call, ask for documentation of the debt in writing. The FDCPA says that a debt collection agency can’t call or write you about the debt again until you receive the proof.
When you get the paperwork, don’t put off looking at it thoroughly. Even though it might be tempting to set it aside, it’s important to go through the letter line by line. You may find out that you do not owe the debt. Perhaps you paid it long ago. Perhaps you didn’t pay the debt, but it’s a very old debt.
Very old debts are often purchased by debt collection agencies for a song. These are debts that original creditors have written off as “uncollectable,” but that doesn’t mean that a debt collection agency won’t try to collect. After all, they have everything to gain and nothing to lose. You should know, though, that many states have laws saying that a debt is no longer collectible after a certain number of years. This is called the statute of limitations. Debt collection agencies count on most consumers being unaware of the statute of limitations, and go ahead and try to collect anyway. Unfortunately, more often than not, people get tricked into paying up.
If the documentation you receive lists a creditor other than the original creditor (such as a case where a debt collection agency purchased liquidated bad debt), you have the right to ask for the name and address of the original creditor – providing you do so within that 30-day window. That’s why it’s critical to review the paperwork when it comes in the mail. You don’t want to miss the window of opportunity you have to dispute the debt.
Validating the debt is an important first step in fighting debt collectors. If you don’t feel you can do it alone, by all means contact a fair debt attorney. It should be free, and having an advocate by your side can mean the difference between sleepless nights and peace of mind.
Get more legal tips