Being collected for a debt that you owe is stressful. When a collections agency is already in the picture, that is a reminder that you had been defaulting on your payments. The creditor gave up or is about to give up on your account and that is why they passed on the account to a debt collector.
But what will you do if you are being collected for a debt that you do not owe? You need to know your legal rights when it comes to debt collectors and one of them is your right to dispute debts that you do not owe.
4 steps before you appeal for a debt being collected from you
When you are being collected for a debt that you are certain is not yours, it is not enough that you tell the debt collector off. It is not as simple as that. Otherwise, the collector could continue to bother you and might even report you to the credit bureaus. You need to know how to properly challenge a debt collector and dispute debts that you do not owe.
Before you dispute debts, here are the 4 steps that you need to follow when a debt collector calls you.
Step 1: Do not be too quick to acknowledge the debt. Debt collection calls are always recorded so you need to be very careful about what you say. It can be used against you under the court of law. There are several reasons why you should not acknowledge the debt.
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It may be your debt but it could be past the statute of limitations in your state.
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It may be the debt of a relative that recently passed away and the creditor wants to trick you to pay for it instead.
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It may be under your name but the result of an identity theft.
Make sure that you do the second step first before you acknowledge anything – whether it is your debt or not. You have to know that it will restart the statute of limitations – in case you are past it already. The collector will then win back the right to collect from you for that debt.
Step 2: Request for verification of the debt. In that initial conversation, request for a verification of the debt that the collector is asking from you. Even if the initial contact is past, you have 30 days to ask for this verification. The debt collector is required by the law to comply with your request. They are not allowed to contact you unless they send this verification.
Step 3: Get a copy of your credit report. Before you get down to dispute debts that are wrongfully being collected from you, take a look at your credit report first. Order a copy or download a free copy from the AnnualCreditReport.com. Check if the debt being collected is written in your report.
Step 4: Take action on the debt. When you have gone through the 3 steps, you can now decide on what to do with it. Here are some scenarios:
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If it turns out that it is your debt and you are not past the statute of limitations, you have to pay off the debt.
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If it is from your deceased spouse and you live in a community property state, that debt may legally be your responsibility now.
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If it is from a deceased loved one and you are legally not responsible for it, you can dispute the debt.
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If you are a victim of identity theft, you can dispute these but it will take some time.
In case the debt is not yours and you want to dispute debts, tell the debt collector about your plans. If the debt collector continues to harass you or fails to verify the debt, you should know that you have every right to file a complaint with the Federal Trade Commission (FTC).
What the FDCPA says about disputing debt
The law that protects you against the abusive practices of debt collectors is known as the FDCPA or Fair Debt Collection Practices Act. You will find a more detailed explanation of this law in the FTC.gov website.
Here are important points that you may want to know about this.
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When you dispute debts, your FDCPA rights include: the right to get a notice about the debt; right to contest the details of the debt; right to get verification for the debt.
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Request for a verification 30 days after the initial communication is made by the debt collector. Failure to do so within this timeframe will give the collector leniency to keep on calling you or to refuse to send you a verification.
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The 30 day period will only begin when the collector sends you a written notice about the debt.
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While you can say it over the phone, you will not be exercising your right unless you send a written dispute to your debt collector. Make sure you document the request for verification and get a return receipt to prove when the collector received it.
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Always keep a copy of your communication efforts.
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In case of an identity theft, include a police report in your dispute letter.
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In case you have paid off the debt, send a copy of the proof that you do not owe anything for the debt.
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You can immediately file a complaint if the debt collector receives proof that you do not owe the debt and still continues to harass you. The FDCPA is very strict about collectors continuing with their collection efforts even if they know that the debt is false.
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The collector cannot report you to credit reporting agencies when you dispute debts. At least, until they comply with your requests.
Debt collectors are notorious for their abusive practices so make sure that you know your rights. If case you have to dispute debts, read the FDCPA to avoid being led with false information.