Dealing with the Debt Collector

So, you might be thinking that this is a great topic but maybe for someone else. After all, I don’t have a debt collector problem. Even if you have perfect credit, there is a high probability that you will encounter a confrontation with a debt collector at some point. This is information that everyone needs to know.

Let’s review the various scenarios:

1) You get a call or receive a letter from a debt collector and the debt is yours.

- Get the address of the debt collector and send a request to verify the debt and the amount of the debt. Chances are you would receive all of that information with the debt notice. If not, go through the process of getting it verified. You first need to make sure that everything about the debt is legit.
- If there is something that you don’t agree with about the debt, your next step is to dispute the debt.
- If the debt has been verified and the debt dispute is unsuccessful, you now have a choice to make. You can either send a cease and desist letter or start dealing with the debt collector.

REMEMBER: If the debt is a valid debt and still in the statute of limitations period (period in which a debt collector and/or creditor can file a lawsuit), you are taking a chance sending a cease and desist letter. By law, the debt collector has to stop collecting. Thus they have a choice as to whether or not their next step is to pursue legal action.

2) You get a call or receive a letter from a debt collector and the debt is not yours.

- First, make sure that an identity theft has not occurred (if it has, see below).
- Second, check and make sure that this is item is not showing up on your credit score (if it is, see below).
- Send a dispute letter to the collection agency stating that they have the wrong person. It is important to include some proof. However, never send them any information that they can turn around and use in the debt collection process.
- If that still doesn’t work and you are positive the debt is not yours, send them a cease and desist letter. If something legal comes of it, you should be able to defend yourself.

(3) You get a call or receive a letter from a debt collector, the debt is not yours, and an identity theft has occurred.

- Immediately place a fraud alert on your credit reports.
- File a police report.
- Contact the company to let them know there has been an identity theft.
- Remember in an identity theft you are guilty until you prove your innocence. Thus, you want to make every effort to prove that debt is not your debt. You attempt to do this with the debt collector and/or original creditor.
- Start working to get the information removed from your credit report.

(4) You get a call or receive a letter from a debt collector, it is not your debt, and the debt is showing up on your credit report.

- Immediately go through the process of disputing that debt with the credit reporting agency, as outlined above.
- Keep an eye on your credit report because of the likelihood of this mistake reappearing.

Tips:

- Communicate through certified mail with debt collectors – phone calls typically end up being a dead-end.
- If a debt collector harasses you and breaks the law, seek the help of an attorney. For more information, go to www.deanmalone.com.
- Stay very organized and keep good notes.
- If you are served legal papers, make sure that you take them seriously. It is important to get an attorney.

Copyright © 2008 Prudent Money and Bob Brooks. All rights reserved.