A shocked woman looks at her phone, wondering what to do when a debt collector contacts you.

What to Do When a Debt Collector Contacts You

Dealing with debt can feel overwhelming, but knowing what to do when a debt collector contacts you is important.

Medical bills, credit card bills, student loans, and other types of debt are often sent to a “collection agency,” which then becomes responsible for collecting payment from you. Debt that has been sent to collections can negatively impact your credit score. Creating a strategy once you have been contacted by a debt collector is an important first step.

The debt collection process can be confusing, and debt collectors can be very persistent in their attempts to collect payments, making the experience stressful at times.

However, the behavior of debt collectors is restricted by the Fair Debt Collection Practices Act (FDCPA), which prevents debt collectors from rude, offensive, or misleading methods when interacting with you. You may want to consider speaking with the debt collector at least once to get information about the debt to find out if it is actually yours, and if it is, confirm you haven’t already paid it to the company that gave you the loan or credit. You also want to make sure that the debt is related to a medical bill, that the bill was sent to your insurance company, that there were no mistakes in the billing, etc.

Once you know what a debt collector can and cannot do, you can approach the interaction with more confidence:

How can a debt collector contact you?

Debt collectors can call, text, email, and send letters.

When and where may a debt collector contact you?

They can only contact you between the hours of 8am and 9pm.

Debt collectors cannot contact you at work, call your employer, or show up at your workplace. A debt collector can only contact you, your spouse, or your attorney, if you are represented.

Can you stop a debt collector from contacting you?

Yes. But, it is important to realize that just by having the debt collector stop contacting you, the debt does not go away. The FDCPA states if you formally request to not be contacted, the debt collector must stop all further contact. To make this formal request, you need to send them something called a cease and desist letter. There are many templates online you can use for your letter, but it is important your letter says you are making the request according to the FDCPA and that you want both written and oral communication to stop. This means the debt collector can no longer call you or send text messages, emails, or letters.

Is there anything a debt collector must say or do?

When a debt collector contacts you, they must tell you: the amount owed, who the original creditor is, that you may dispute the debt, or that you may seek verification of the debt. This means you can send a letter back to the debt collector and ask that they send documents confirming whether the debt is yours. If you don’t think it is, you are allowed to challenge it with the debt collection agency or a credit reporting bureau.

What are debt collectors NOT allowed to say or do?

Under the FDCPA, collectors cannot:

  • Threaten to hurt you or your family members
  • Use obscene language
  • Call you repeatedly at all hours
  • Lie about the amount you owe
  • Collect interest or charge fees (unless permitted by law)
  • Publicly reveal your debts (this means they can’t send a postcard anyone could read or put information about your debt on the envelope mailed to you, or tell an employer/coworker, friends, or neighbors about your debts)

Does debt go away?

Generally, no. But, debt collectors have a limited amount of time to sue you to collect on a debt. This is called the statute of limitations and it varies depending on the state you are in. If they do not sue you during this time, a debt collector cannot sue you in the future to collect it. However, the original creditor can still sue you or make attempts to collect the debt. Additionally, any payments you make on the debt, no matter how small, or any inquiries made into the debt can restart the clock on the statute of limitations.

How does this impact your credit score?

Debt sent to collections can have a significant negative impact on your credit score. A low credit score can make it hard to borrow money later. It can impact renting an apartment, getting a new credit card, or trying to buy a car. If you can get a loan, you will likely have to pay higher interest rates on those loans.

Debt sent to collections will remain on your credit report for seven years. Even if you pay the debt off, it will appear on your credit report as “settled” until it drops off your report. Even though paying off debt will not improve your credit score, you should still pay back the money you owe. If you don’t pay back the debt, the collections agency can still collect through a lawsuit, which can be very expensive. Additionally, paying back a debt shows more financial responsibility than someone who does not pay off their debt, which can be helpful if you try to get a loan in the future.

Medical debt is slightly different from other types. Most health care providers will not send your debt to collections right away. This gives you more time to work out a payment plan before it can negatively impact your credit score. Additionally, the three main credit bureaus have a 180-day grace period for you to pay the debt before it appears on your credit report. As you pay off your medical bills, the credit report will be updated to show it has been paid. This can improve your credit score.

What are your options for repaying the debt?

Once you have determined the debt is valid, there are typically three ways to approach your debt:

  • Paying the debt in full (if you have the money to do so)
  • Setting up a payment plan
  • Asking to settle the debt (possibly for less than the full amount)

You should choose the process that works best for you and ensures your basic needs are met. Be aware of scams that promise to settle your debt for you or scrub your credit score of the debt. The only real way to get out of debt is to pay it back. You should never pay for any service that promises to make it go away.

About Triage Cancer

If you feel overwhelmed by debt, Triage Cancer is here to help. You are not alone. For more information on navigating finances, visit CancerFinances.org.

Triage Cancer is a national, nonprofit providing free education to people diagnosed with cancer, advocates, caregivers, and health care professionals on cancer-related legal and practical issues. Through eventsmaterials, and resources, Triage Cancer is dedicated to helping people move beyond diagnosis.

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