1. What should I do when a debt collector contacts me?

There are different ways to respond appropriately to debt collectors. Depending on your situation, we have sample letters you can use if you're experiencing common problems.

When contacted, find out the following:

  • Identity of the debt collector, including name, address, and phone number
  • The amount of the debt, including any fees such as interest or collection costs
  • What the debt is for and when the debt was incurred
  • The name of the original creditor
  • Information about whether you or someone else may owe the debt

When a debt collector first contacts you in writing regarding a debt, it must provide you a written notice that has certain, legally-required information. If the collection agency first contacts you by phone, insist that they contact you in writing. Do not give personal or financial information to the caller until you have confirmed it is a legitimate debt collector.

2. Are there laws that limit what debt collectors can say or do?

The Fair Debt Collection Practices Act (FDCPA) is a federal law that provides limitations on what debt collectors can do when collecting certain types of debt. The federal Fair Credit Reporting Act covers how debt collection is reported in credit reports. In addition, there are state laws that provide protections.

The Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) is the main federal law that governs debt collection practices. The FDCPA prohibits debt collection companies from using abusive, unfair or deceptive practices to collect debts from you.

3. What is a statute of limitations on a debt?

A statute of limitations is the limited period of time creditors or debt collectors have to file a lawsuit to recover a debt.

Most statutes of limitations fall in the three-to-six year range, although in some jurisdictions they may extend for longer depending on the type of debt. They may vary by:

  • State laws
  • What type of debt you have
  • Whether the state law applicable is named in your credit agreement

Under state laws, there are often legal time limits within which a creditor or debt collector must start a lawsuit or the claim may be “barred.” These laws are called “statutes of limitation. If you're sued about a debt and the debt is too old, you may have a defense to the lawsuit.

In some states, the statute of limitations period begins when you failed to make a required payment on a debt. In other states it is counted from when you made your most recent payment, even if that payment was made during collection. In some states, even a partial payment on the debt will restart the time period.

4. What may happen if I ignore or avoid a debt collector?

Ignoring or avoiding a debt collector is unlikely to make the debt collector stop contacting you. If you believe you do not owe the debt, you should tell the debt collector. If the debt is yours and you can’t afford to pay it, you may be able to make arrangements with the debt collector. You can also ask the debt collector in writing to stop calling you, which will stop the phone calls.

You might also consider consulting a credit counselor. Credit counselors are organizations that can advise you on managing your money and debts, help you develop a budget, and usually offer free educational materials and workshops. Credit counselors are usually non-profit organizations.

Ignoring or avoiding the debt collector may cause the debt collector to use other methods to try to collect the debt, including a lawsuit against you. If you are unable to come to an agreement with a debt collector, you may want to contact an attorney who can provide you with legal advice about your situation. Your legal aid office may have information for you in their office or on their website. You also may qualify for free legal services through legal aid or legal clinics, depending on your income and where you live.

5. How can I stop debt collectors from contacting me?

You have the right to tell a debt collector, in writing, to stop communicating with you. 

6. What is a garnishment?

A wage garnishment occurs when a creditor takes a portion of your paycheck to collect money you owe. Garnishments generally require a court order that results from a judgment.

Some states do not allow wage garnishments for certain kinds of debt. It is also a violation of the Fair Debt Collection Practices Act (FDCPA) for a debt collector to threaten that your wages will be garnished if your wages cannot legally be garnished.

7. Why is the name of the debt collector different than the name of the company I owe money to?

Companies sometimes hire debt collectors to collect debts for them. Creditors will sometimes contract with outside companies to collect debts for them or will sell debts that are owed to them. In either case, the name of the company contacting you about an unpaid debt may be different than the original creditor who gave you the loan or credit. Any debt collector who contacts you claiming you owe money on a debt is required to tell you certain information about the debt. That information includes:

If the debt collector doesn’t provide that information when it first contacts you, it's required to send you a written notice including this information within five days after first contacting you. It's generally a good idea to get this written notice before you pay the debt collector.

The Fair Debt Collection Practice Act (FDCPA) requires a debt collector to inform you who currently owns the debt. If you don’t recognize the name of the creditor, ask the debt collector if it might have purchased the debt from another company that first made the loan and, if so, what the name of that company is.