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DebtCC Wiki: How to manage debt and avoid scams

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    According to the Bureau of Labour Statistics, in U.S, workers were paid a fair amount of money per week in the year ending of 2012. There was a 4.7% increase in wage from 2011. However, the overall statistics says ,wages have been falling since 2012. This situation has forced the low paid workers to get into poverty.According to EPI (Economic Policy Institute) report, workers are suffering for the poor wage distribution. In recent times, two county (Manhattan and Los Angeles County) witnessed severe fal...

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Community Discussions on Credit Monitoring


Who are debt collectors and what can they do?

Debt collectors collect past-due or unpaid bills from consumers. They are of 3 types – (a) assignee (b) debt buyers (c) collection attorneys. Accounts are often assigned to collectors by the creditors when they are unable to get back money in spite of their best efforts. They get commissions on the basis of the collected amount. Sometimes, collectors buy accounts for pennies on the dollar. On the other hand, creditors sometimes assign accounts to law firms who can sue consumers for fast debt recovery.


What can the debt collectors do?

Here's what collectors can do to collect money from consumers:

  1. They can call you for collecting money
  2. They can call your relatives for getting your contact details
  3. They can sue you and garnish your wages
  4. They can seize your property after getting judgment order from court
  5. They can report your accounts to your credit report
  6. They can sell your accounts to other collection agencies

When can you get calls from collectors?

As per the FDCPA Act, collectors can call you between 8:00am and 9:00pm regarding payment related issues. They should stop calling at your office if you're not allowed to entertain collection calls there. Moreover, if an attorney is representing you regarding this debt, then the collector needs to deal with him.


How can you deal with debt collectors?

Check out the following tips and find out how to deal with debt collectors:


  • Ask them to prove that you owe money: Send a debt validation letter to the collection agency via certified mail with return receipt request. This will help you know if the collection agency has been really authorized by your creditor to collect money. Don't acknowledge the debt if you're not the one who owes money.
  • Dispute debt if it is not valid: If the collection agency is unable to prove you owe money, then dispute the debt in writing. You can send a letter via certified mail to the CA and inform them to not contact you again.
  • Maintain all the records: You must pay an amount as per the records. Keep records of the conversations you had with collectors. Don't pay money just because you want to get rid of a harassing collector. Sometimes, collectors don't have proper records with themselves. So, keep records of all the documents for as long as you want. It may happen that you get a collection call for a loan which has been paid off 15 years back. The records and documents will be extremely helpful during those days.
  • Protect your bank accounts: Keep separate bank accounts for your Social Security funds and the disability payments. The collector can freeze your bank account through a court-order. It will be very difficult to manage your family budgets during that period. So, keep Social Security funds and the disability checks (which are exempt from garnishment) in separate accounts. At least, you can easily use the money for meeting your expenses.
  • Strike out a deal: Shake hands with the collector and negotiate a payment plan on valid debt on the basis of your monthly income. Set up an arrangement which won't make you cross your budget while making payments to the collector. Get help from a credit counselor or a debt negotiator if you can't make payments to multiple collectors on your own.
  • Get a written agreement: Get the repayment plan in writing from the debt collection agency. The plan should be signed by a representative of the agency. This would help you avoid miscommunications regarding the terms and conditions of payment plan in future.
  • Know about your rights: It is important to know about the basic consumer rights in order to deal with debt collectors. For instance, you've the right to ask collectors to validate debt after receiving a collection notice. You also have the right to ask the identity of collector, name of the collection agency and debt amount. Know about your right under the Fair Debt Collection Practices Act and find out what you can do if the collectors violate the laws.
  • Complain if it is necessary: Don't sit back at home if you're being harassed by a debt collection agency. Search in the Internet and get the contact details of the state attorney general, FTC or a consumer attorney. A good attorney can tell you how to beat debt collectors at their own game. Take legal action against the agency in the event of extreme harassment.

What kinds of restrictions do they have?

Collection agencies are prohibited from taking some actions while collecting debts. Read below to know about them.

  • Making collection calls incessantly
  • Using abusive or dirty languages
  • Giving false information about the debt or CA
  • Threatening to hurt you in any way
  • Sending papers that appear to be an official document
  • Revealing your debt information to your relative or a third-party
  • Pretending to be a government official or attorney

What should you do if collectors file a lawsuit?

Debt collectors can file a legal complaint when they don't receive payments from you. If a lawsuit is really filed against you, then give a prompt response to the summons on your own or through an experienced consumer attorney. Make sure to respond within the date mentioned in the court papers. This will help you preserve your consumer rights.


If collectors are able to prove that you owe money on a valid debt, then the court may issue judgment order. This will empower the collectors to garnish your wage/bank accounts and get back their money.

If you’ve made late payments or you haven't made any payments for many months, then your accounts can be assigned or sold to collection agencies.


Who are debt collectors?

Debt collectors collect payments from you on behalf of your creditor. They become legal owner of the account after it is sold to them.


Your account may get passed around various collection agencies. You may get multiple harassing collection calls and many chances to resolve the accounts.


Here are some tips to handle debt collectors in different cases.

Case 1: You owe the debt

  • Stop avoiding collectors: Respond to the collection calls to negotiate payments on the debt. If you ignore the calls, then your account can be placed with a collection attorney who can take you to court.
  • Don't reveal much: Any information you provide should be limited to the fact that you can’t pay your bills.
  • Record your conversation: Keep a record of the collectors you've spoken to, the time, and a summary of your conversation. You can use this as proof when they violate the federal laws.
  • Verify or validate the debt: Send the debt validation letter to ask for validation of the debt in writing. This is crucial as collectors often contact debtors for the time barred accounts; invalid debts, for amounts that are over inflated.
  • Ask for some time: If you’re unable to pay off a valid debt, ask the collector to give you some time to develop a payment plan. Check out how to settle your debts yourself or pay off bills through a debt consolidation program.
  • Use a Cease and Desist Letter: Send a Cease and Desist Letter to stop the collector from contacting you. In case the SOL period has not expired, then the collector can send your account to an attorney to sue you.

Case 2: You've already paid off the account

If your account is paid off, then you’ve 2 options :


  • Dispute the debt: Dispute the debt within 30 days of receiving a notice (with creditor's name) telling you how much you owe. Send this letter via certified mail.
  • Send in proof of your bill payment: You can attach proof of your bill payment (payment notice from creditor, payment arrangement letter from another CA, etc) with your dispute letter.
    As per the FDCPA laws, a bill collector can’t renew collection activities unless he can prove you owe the debt. If a collector still harasses you, then file a complaint with the FTC or contact an attorney or your State Attorney General.

Case 3: Your debt is too old

If the collector contacts you after the SOL has expired, they cannot legitimately take you to court. You’re still responsible for the debts, but the risk of wage garnishment is reduced.


Check out the SOL period in your state carefully. In some states, SOL clock is reset once you admit to a debt or begin making payments after default.


Don’t acknowledge a time barred debt. Simply ask the collector to stop contacting you, through a SOL Expiration sample letter.


Case 4: Your debt has been discharged in bankruptcy

In this case, dispute it on your own. Include a copy of your discharge order. File a complaint with the bankruptcy court with the help from an attorney. You can also file complaints with the FTC, your attorney general, the CFPB.

Case 5: You actually don't owe the debt

Send the collector a validation letter. The collector has to prove that you owe the debt or stop contacting you. Send a Cease and Desist letter if he fails to validate the debt. File complaint with authorities if you still get collection calls.


Dealing with creditors and debt collectors become easier when you're aware of their tactics, your state's collection laws, and your consumers rights.

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