If you've been making late payments or you haven't paid for months, your creditor may send your debt account to collections. That is, your creditor may pass on your account to its in-house collection department or hire a third party collection agency (CA) to collect the debt from you. He may even sell off your account to third party debt collectors.

Who are debt collectors?

Debt collectors (bill collectors) in a collection agency try out various means to collect payments from you. When your creditor hires a bill collector, the former retains the right to your account while the collector simply acts on behalf of the creditor. However, when creditors sell off your accounts to a third party debt collector, the latter becomes the legal owner of your accounts. This is when creditors charge off your account.

The debt collectors may in turn sell off your accounts to another collector. That is why you may get sudden calls for payment of a very old debt account which is well past the Statute of Limitations (SOL). However, third party debt collectors often harass debtors with their threatening phone calls/letters and illegal practices to collect payments. If you're interested to know how to fight debt collectors, just take a look at the section below.

How to fight debt collectors

If you're concerned about how to handle debt collectors, know your rights as a consumer and use them in dealing with collectors - their harassing calls/letters and illegal practices. Given below are the tips on how to handle debt collectors in different cases.

Case 1: You owe the debt

• Stop avoiding debt collectors: If you don't answer collection calls, things may get worse. The collectors may take you to court and get an order against you in order to garnish your wages.
• Don't reveal much about your finances: Don't speak about your finances in detail because after all you don't know the collector. The collector can use any extra information against you as because he's only interested in collecting payments from you.
• Record your conversation: Keep a record of the bill collectors you've spoken to, the time and summary of your conversation. You can use such records as proof against bill collectors who violate the law. You can even tape the conversation (secret taping is allowed by 35 states and the District of Columbia). However, if secret taping isn't allowed in your state, just take the collector's permission before you tape the conversation.
• Verify or validate the debt: When a collection agency (CA) claims that you owe them a certain amount of money, you need to send a written request to the agency asking them to prove or validate that you owe the debt. Just check out the debt validation letter to know how to ask for validation of debt in writing. Debt validation is essential at times because collectors often contact debtors for old debt which has crossed the SOL period or for debts which have already been paid off.
• Request for some time to pay off debt: In case you owe the debt and you're unable to make payments, request the CA for some more time till you find out how to pay off the debt. You can either go for settlement or request a new payment structure which you can afford. Just check out the information available on how to settle your debts yourself when the debt is held by a collector.
  
  If there are multiple debts, you may enroll in a debt consolidation program. By choosing to pay off bills either by settlement or a consolidation program, you get the chance to avoid harassment from collection agencies.
• Use Cease and Desist Letter: In case you wish to contact the creditor and deal with him directly regarding payment of your debt, you can request the CA to stop contacting you. This can be done by sending them a Cease and Desist Letter.

Case 2: You've already paid off the debt

If your debt is paid off, here's how you should be dealing with debt collectors when they contact you for payments.

• Dispute the debt: You need to dispute the debt within 30 days of the bill collector sending you a notice (with creditor's name) on how much you owe. Send this letter through certified mail so that you'll know when the CA has received it.
• Send in proof of your bill payment: You need to attach proof of your bill payment (payment notice from creditor, payment arrangement letter from another CA etc) with the debt dispute letter.
  
  A bill collector cannot renew collection activities unless he can show you proof of the bill you owe. However, once you provide collectors with enough proof that you've paid off the bill, they'll fail to renew collection efforts. If they still harass you, just remind them that they're violating the FDCPA and contact a consumer attorney to help you deal with such issues. You may even file a complaint with the FTC (at "https://www.ftccomplaintassistant.gov/") or your State Attorney General.

Case 3: Your debt is too old

If you receive collection calls on a debt which is 5 to 10 years old or more, do not worry as old unpaid bill won't hurt you as much as a recent one. If the collectors contact you after the SOL (say, it is 6 years in your state) expires, they cannot threaten you or take any other legal action against you, as it is against the FDCPA. No doubt, your obligation to pay off the bill remains. But in most states, once you restart payments after the SOL has expired, it's similar to making the old debt new again. The SOL actually restarts all over again! In this case, the SOL of the state where you stay currently is to be considered.

Thus, when it comes to dealing with debt collectors about an old debt, it is better to not acknowledge the debt. Simply ask the collector to stop contacting you thereby stating that you're well aware of the SOL expiry date. Just browse through the SOL Expiration sample letter, which can help you communicate with the collector in this regard.

Case 4: Your debt has been discharged in bankruptcy

If your debt has been discharged in bankruptcy Chapter 7, try to dispute it on your own. Do include a copy of your discharge order, which proves the debt has been discharged. If in case the collector ignores your letter, it's better to file a complaint with your bankruptcy court for violation of the discharge order. Or else, you may contact your bankruptcy attorney to assist you in dealing with such an issue.

Case 5: You actually don't owe the debt

Write a Cease and Desist Letter to the collection agency stating you don't owe the debt. This is to make sure that they don't contact you anymore. If the debt collector still tries to validate your debt and fails to do so, then he doesn't have the legal right to contact you further.

Dealing with debt collectors becomes easier when you're aware of the tactics, basic laws and consumers rights that can prevent them from ruining your life. Negotiating with debt collectors in order to clear the debt is a good option. You can simply start off with a no-obligation free counseling with a debt relief company. They'll help you to pay off debt without having to worry about collection calls and harassment.