You arrive home from shopping and find a message on your phone from a bill collector. You know your credit. You know you always pay on time and are not behind on any credit card bills or loans. Why then, is there a message from a debt collection agency on your phone?
Its a ploy by some debt collectors to squeeze out some money on debts that are years old. You may have had some trouble sometime in your past and now these collection agencies are unearthing old debts that are five to 10 years old.
Handling a bill collector who is trying to collect on old debt can be tricky. If the debt is older than your state's statute of limitations, the bill collector has no legal right to collect. In other words they can not sue you or threaten to sue you. If however, you handle the call poorly, that old debt can become new debt.
Bill collectors who threaten to sue or have your wages garnished on a debt that is not covered by the statutes of limitation are in violation of the Fair Debt Collection Practices Act and could be fined $1000 for each threat. If they are smart they know that and will play on your sense of moral duty to collect the bill.
So what's the problem? If the collection agency has no legal right to collect, then it looks like you have the upper hand. However, in some states, if the collector can get you to admit the debt is yours or if you pay any amount of money on the debt, the debt becomes new. Not only does the statute of limitations start again, but the collection agency can report the debt to the credit reporting agencies and suddenly your FICO score takes a dive and you start receiving letters from your credit cards advising of higher interest rates and lower lines of credit.
The best way to handle a collection call for an old debt is to say as little as possible. Don't agree to pay. Don't acknowledge the debt. If it wasnt for the annoying phone calls that are going to keep coming, it would be best not to speak to the collection agency at all.
The time to stop the phone calls is before they begin. Under the law, a debt collector has to send you written notice advising who the debt is with and for how much. You have 30 days to respond. If this is in fact a debt that is older than the statute of limitations, send a letter disputing (not mine) the debt. The collection agency cannot contact you again until they can verify the debt and notify you. If they can't prove it, you don't owe it.
Another more direct approach is to use your right to send a cease and desist letter. Make it clear in your letter that you're aware that the debt is "time-barred," and you can't be sued for the debt and you don't want to hear from them again. Make certain that the debt is actually beyond the statute. The best way to check is with your State Attorney Generals office or consult with a consumer credit attorney
Learn more on the fastest ways to deal with collection agency calls and get free sample credit letters for use in clearing debts.
Do you have bill collectors calling now? Are you trying to repair your credit yourself? Do you need some help budgeting? Visit http://trycreditfix.com for tips on these and much more.
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