Dealing with the collection agency (CA) is one of the most dreaded things for the debtors, since collection agencies are generally known to harass debtors for collecting debts. They call at any time, and threat the debtors over the phone. However, there are laws and various ways to deal with the collection agencies.
1. Knowing the rights – the very first thing that you should do so as to deal with the collection agencies is to know your rights. They threaten you with dire consequences if you don’t pay them, they call at odd hours. If you fear to deal with them, and fall into their trap, you should know that there is a rule under Fair Debt Collections Practices Act (FDCPA) that prohibits the collectors from threatening or calling the debtor at odd hours. (Calling hours: 8 a.m. to 9 p.m.)
2. Debt validation – the collection agency can list a debt on your credit report, and may harass you for paying off the debt. However, you should know that you have the right to know whether the debt has been incurred by you. As an answer to your debt validation the collection agency is required to provide you with proof that they have the authority to collect the debt, your original contract with the creditor, and the outstanding debt amount. Most of the time CA sends an answer to your validation without the required proofs. Debtors not knowing what the CA is supposed to provide start making the payments. The CA must provide at least any two of the proofs.
3. Statute of limitations – Statute of limitations (SOL) is the time limit within which the collection agency can sue you for not paying the dues. However, once the SOL expires, even if the collection agency sues you, they may not be able to win a judgment against you. SOL varies according to the state and the type of account. So, don’t fall into their trap and start payment without checking the SOL on your debt. Once you start any paying, or use the account in any way, the SOL restarts.
4. Communicate in writing – Whatever communication you do with the CA, do that in writing. Later if any discrepancies arise, you will be able to use the written proof to dispute the discrepancy. Sometimes collection agencies agree to payment requests or “Pay for deletion” agreements, but don’t provide you with written agreements. Never ever fall into this trap. Get all the agreements in writing.
5. How old the debt is – You should know as to how old your debt is. If it is more than seven years old, the negative item will fall off from your report. However, if the collection agency changes the reporting dates, you should dispute this. As, reaging of debt is illegal.