Dealing with debt collectors isn’t an ideal financial situation but can be the result of a multitude of situations when paying bills. Debt collectors are commonly involved in a financial situation when you have unpaid debt within a certain amount of time, in most cases 30 days.
Whether you didn’t pay a bill on time or had a billing error, the original company you owe money to can sell your debt to a third-party debt collection agency. This is easier on the original collecting company as they get their money and leave the debt collection agency to take over the process of getting you to pay your debt.
It’s important to know your rights when dealing with debt collectors starting with the Fair Debt Collection Practices Act. This Act covers various types of debt including car loans, credit card debt, medical bills, and any other personal debts (not anything business-related).
The Fair Debt Collection Practices Act prohibits deceptive, abusive, or unfair practices committed by debt collectors and is enforced by the Federal Trade Commission (FTC). This Act limits certain call times debt collectors can contact bill collectors so they can’t call at certain times without permission. Debt collectors are also prohibited from contacting you at work unless given permission.
Bill collectors can make contact through various means like text messages, phone calls, emails, or letters. Bill collectors are required to disclose certain details about your debt including who you owe money to, how much you owe, the process of when you think there is a mistake, and sending a written notice within five days of first contacting you.
Debt collectors are prohibited from harassing people and other parties they may attempt to contact to try to collect your debt. Bill collectors are allowed in certain circumstances to contact other people about your debt if the collectors are trying to get your personal information like your phone number, address, and where you work.
Debt collectors are limited to contacting other people about your debt only once. There are signs of collector harassment that is prohibited and can infringe on your rights.
Signs Of Debt Collector Harassment:
- Threatening to arrest you.
- Threatening to harm you.
- Claiming you have committed a crime when you haven’t.
- Using explicit language.
- Making false statements and misleading their position or profession.
- Calling repeatedly.
Once you have all the required information and confirm that the debt in collection is valid, you can try to negotiate with the debt collectors. Most collectors are open to negotiating fees to help manage your financial situation and all you have to do is ask if payments are negotiable.
Not paying your bill within the time restrictions is one common case for debt collectors but in some cases, billing errors can get debt collectors involved. In some cases, people pay off their debt, but a billing error can result in the debt being carried over to a debt collector.
This issue can happen when a provider is paid but created a billing error not marking the bill as paid and is automatically sent to a debt collector. To resolve the billing issue, it’s recommended to look through financial transactions and get proof of paying the bill that you can provide to the debt collector.
There might be some more requirements to resolve debt with a debt collector, but proof of payment is a common first step for resolution. In most cases, you’ll have to contact the original company for proof of payment and request they contact the debt collector to confirm the billing error.
The best practice is to deal with debt as soon as possible as it can negatively impact your credit score and appear on future credit reports. This damage can be hard to undo, so it should be addressed before debt collectors get involved.