The Complete Guide to Debt Collectors

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Approximately 70 million people living in the U.S. have an account in collections.  If you’re one of these 70 million lucky people, you may know that having debt in collections doesn’t only affect your bank account or monthly budget. For many, debt collectors first introduce themselves by calling your phone often. A little too often. Their job is to get the money that you owe (or at least supposedly owe) however they can.

Unfortunately, debt collectors are not necessarily saints living amongst us. Oftentimes, they will use predatory tactics in order to get what they want from you. They pressure you to pay up, harass you over the phone, and even threaten to take legal action against you if you fail to pay.

Your best line of defense against abusive debt collectors is to know your rights and when to use them. This article covers what your rights are, tips for dealing with debt collectors, and methods of squashing your old debts for good.

Know Your Rights: Everything You Need to Know About the FDCPA

The Fair Debt Collection Practices Act (FDCPA) is definitely something that you should get familiar with if you have an account in collections. This Act became effective in 1978 and was designed to eliminate abusive and unfair debt collection practices. Before the Act was passed, debt collectors were free to use almost any means imaginable to get debtors to pay up, including threatening them with physical harm.

The Federal Trade Commission (FTC) is responsible for enforcing the rules in the FDCPA, as well as other laws and regulations. This Act can be summed up as “limiting how and when debt collectors can contact you, what they can do to get you to pay, and empowering you to dispute debts.”

Protections Offered by the FDCPA

Now that you get the general idea of the FDCPA, it’s good to get familiar with some of the main protections the FDCPA grants you as a consumer.

1. Debt Collectors Have Restrictions on How They Can Contact You

Legally, a debt collector is only allowed to contact you between 8 AM and 9 PM. If a collector calls you outside of those hours, it is your right to document the incident and inform them that you will be reporting it to the FTC.

The FDCPA also states that debt collectors cannot contact you on the job. If they do contact you at your place of work, it is illegal for them to do so. Having debt collectors calling your workplace can affect your job performance and security.

Finally, the Act prohibits debt collectors from contacting third parties about your debt. That includes relatives, friends, in-laws, and anyone else that isn’t you.

Methods Debt Collectors Can Use to Contact You

If you’ve dealt with debt collectors before, you may have received phone calls, emails, or mail correspondence from them. It can get quite stressful when you’re constantly reminded that debt collectors are waiting for you to pay up.

Under the FDCPA, you can opt to communicate with debt collectors by mail only, or not at all if you like. That immediately puts a stop to all phone calls, and if you choose to stop all communications, they cannot even send you letters. You are also within your rights to tell the collection agent to communicate exclusively with your attorney. This will provide you with a layer of defense if a lawsuit is brought against you.

Here’s something to note. If you do cease all communication with your debt collector, remember that the debt still exists. It’s your responsibility to validate the debt and make payment arrangements if you choose to do so.

2. Debt Collectors Must Have Honesty in All Interactions

Debt collectors are certainly not known to be the most honest of people. There are hundreds of horror stories involving lying, deceit, and even impersonation when it comes to debt collectors.

This is where it’s crucial to know what the law states. All collection agents are bound by law to be fully transparent in all collection attempts. However, there have been many instances where they are not transparent at all.

One of the ways debt collectors may deceive you is by pretending to be someone that they are not. Be wary if you receive a phone call from a supposed police department or other organization demanding that you pay what you owe. This also extends to letter correspondence as well. They cannot send you letters designed to look like they’re from a government agency or law enforcement.

Lastly, debt collectors are not allowed to mislead you or make false claims about any aspect of your debt. They cannot lie about what will happen to you if you don’t pay your debt. They also cannot exaggerate the ability to seize your property.

With that being said, that doesn’t mean that they’re legally required to provide you with all of the information directly. This is when it’s important to know your rights. Before you go into any type of negotiation with a debt collector, you should know the following:

  • The amount of money you owe and your account details
  • That the debt belongs to you and is accurate
  • The statute of limitations on debt in your state

You may be at a loss if you start speaking with a debt collector before you get familiar with the details of your debt. Being aware of your situation is key to avoiding being taken advantage of by a pushy debt collector.

3. You Have Protections Against Abusive Actions and Language

The main goal of the FDCPA was to ensure that all debt collection agencies were held to a higher standard in terms of how they communicated with debtors.

The FDCPA prohibits debt collectors from harassing or threatening you. They cannot use profanity or derogatory language, threaten to tell others about your debt, or threaten to garnish your wages (unless there’s a court order, but there’s more on that later).

4. You Have Protections When It’s Not Your Debt

If you think about the millions of Americans with debts in collections, it’s easy to assume that there can be some mix-ups here and there. If you receive correspondence from a debt collection agency and you are questioning if the debt is yours, you will need to send the collection agency a validation letter.

A validation letter is a document that demands that the collection agency provides you with information to validate their attempt to collect. You’re basically asking for proof that YOU owe the debt.

Here’s the catch – validation letters are time-sensitive. You are required to mail the validation letter within 30 days of the first time you were contacted by the collection agency. Because so few consumers know about this protection, it is often overlooked.

However, if you know the debt is not yours or at least have a strong suspicion that it is not yours, debt validation can get debt collectors off your back and save your credit score in the process.

FAST FACT : Accounts in collections or accounts that have been charged-off stay on your credit report for seven years.

8 Things You Should NEVER Reveal to Debt Collectors

Now that you’re familiar with your rights under the FDCPA, it’s important to understand how to best communicate with your debt collectors. So far, it’s clear that debt collectors are required to follow certain guidelines to collect your debt. There are rules and regulations that they need to adhere to in order to legally get money from you.

With that being said, debt collectors can be extremely hard to deal with and will cross the line in order to pressure you into paying. If you’re being pestered by debt collectors, here are 8 things to never reveal to them:

1. Phone Number

While the chances are good that the debt collection agency already has your home phone number, don’t give them any others, particularly your cell phone. The more numbers they have, the more they can harass you.

2. Email Address

Never give a debt collector your email address. Once again, this opens up another avenue for them to harass you.

3. Mailing Address

If the debt collector does not have your physical address, do not give it to them unless you intend to create a payment resolution/agreement.

4. Employer Information

If the debt collector does not have your employer/employment information yet, do not give it to them. As outlined in the FDCPA, it is illegal for debt collectors to contact you at work. Unfortunately, it still happens. Getting calls from debt collectors can also reflect badly on you at work if you’re constantly receiving calls, or it comes out that you’re facing financial difficulties.

5. Family Information

Whatever you do, never give a debt collector information about a family member, such as a phone number, employer information, email address, or physical address. This can greatly escalate harassment (and if you’re not the one with the debt, you could be doing your family member a huge disservice).

6. Bank Account Information

This one should be a no-brainer. Never, ever, ever give a debt collector your bank account information. That’s a huge security risk! Any payment arrangements should be made formally and should not involve automatically debiting your account. With that information, there is nothing stopping a debt collector from draining the account in an attempt to satisfy the debt.

7. Credit Card Information

If a debt collector asks for your credit card information, hang up the phone. First, there’s a chance that it’s actually a fraudulent call and the thief is just trying to steal your information. Second, debt collectors should never be able to charge your card because, as with your bank account information, there is nothing stopping them from maxing out the card in an attempt to pay the debt.

8. Social Security Number

If the debt collector does not already have your Social Security number, do not provide it to them. Not only does that protect your privacy and help prevent the debt from being reported to the credit bureaus, but it can help prevent identity theft (many debt collection calls are fraudulent and only look to get information on your identity and finances).

A Crash Course on Debt Settlement

You may have heard of debt settlement before. It’s what it sounds like – you basically settle with a collection agency to pay a lesser amount of the total that you owe. This may seem like the golden ticket you’re looking for, but there are a few things to consider.

1. Will your type of debt work in a debt settlement?

Unfortunately, debt settlement is not designed to work with all types of debt. In fact, it only works with unsecured debts, like credit cards. That means you cannot use it with secured debts that are tied to physical assets. These include home mortgages, auto loans, and most student loans.

2. Have you validated your debt?

As mentioned previously, validating your debt is extremely important when dealing with any type of debt collector. This can be done by sending a series of validation letters.

3. How old is your debt?

All debt has a defined lifetime. After that point, you’re no longer legally obligated to pay it. If your debt is old, your debt collectors are much more likely to accept a debt settlement agreement (and are more willing to accept very low offers).

With that being said, if your debt is over seven years old, it may be beyond the statute of limitations in most states across the country. Also, most negative items drop off of your credit report after 7 years. In some cases, it may be more cost-effective to evade the debt collectors until your debt has reached the end of its lifetime.

To see what the statute of limitations on debt is in your state, here’s a State-by-State Guide.

Takeaways from Debt Settlement

When you’re dealing with debt collectors, it may seem appealing to strike a deal with them in order to get the debt paid down and out of the way. While debt settlement may be right for some, it may not the best option for others.

If you do go down the path of debt settlement, make sure it is right for you and your situation. It can be a positive thing if you’re able to negotiate a reasonable payment plan and even have a negative item removed from your credit report.

Predatory Debt Collectors and Re-aging Debt

Here’s a hypothetical. You get a call from a debt collector claiming that you owe $12,000 in school tuition at a university you withdrew late from. You think back and remember that you signed up for a few classes, but never attended the school. You also remember that you withdrew from the classes a few weeks after the deadline to do so.

But wait… wasn’t that ten years ago? You’ve been well out of college and into your career for a little over a decade. You have been contacted by collections agencies in the past, but haven’t heard from them in years. So why is this collection agency calling you so long after the fact? Illegal re-aging, or negative re-aging, is a horrifying practice that is unfortunately widespread in the debt collection industry. It’s when the dates are changed in relation to your debt.

Here’s how illegal re-aging plays out:

  •  Your original creditor sells your debt to a collection agency.
  • That agency pays just pennies on the dollar for your debt.
  • It will then re-age your debt and push the date of delinquency forward to achieve one of two goals:
  • First, it’s to make the debt look newer, rather than an older debt. Newer debts have more impact on your credit than older ones do.
  • Second, it could be done to get around the statute of limitations on your debt and provide the collection agency with more time to collect, even though the debt should not be legally collectible.

What To Do If Something Seems “Off”

It can be confusing to spot re-aged debt. Collection agencies are often very good and what they do. If you feel that something is “off” about a debt collector’s letter or phone call, here’s what you need to do:

Immediately write a letter to each credit bureau.

The purpose of this is to find the true “delinquency date” of your debt. The delinquency date refers to the date of the first recorded non-payment on the account. This date will then allow you to figure out if your debt has passed the statute of limitations. Here’s what you need to ask for in each letter to the credit bureaus:

  1. Account name and number
  2. Delinquency date
  3. Name of agency initially reporting non-payment
  4. Fair Credit Reporting Act (FCRA) compliance date

Be prepared to pay a processing fee for each letter you send. Once the information arrives, compare it to that in the collection letter or the information that was provided to you over the phone. All of the dates should match. If the collection agency’s date is different, your account has been re-aged illegally.

In no case should you pay this debt. Doing so could legitimize it and affect the statute of limitations on the debt. If the collection agency attempts to use high-pressure tactics, report them to the FTC and/or refer them to your lawyer if you have one.

For more actions that you can take if you feel that your account has been re-aged, check out this full breakdown: What is Re-aging Debt and Can Debt Collectors Actually Do It?

Wage Garnishment 101

Since the topic is everything to do with debt collectors, we would be remiss to leave out wage garnishment. This is possibly one of the worst scenarios next to being sued when it comes to debt.

If you’ve been evading your debt collectors too long, this could result in your wages being garnished. Wage garnishment is the legal process by which you are forced to repay your debts by taking a portion of your income with every paycheck. Many different types of debt can be satisfied this way. It’s not just about credit card debt or personal loans. Tax debt, back child support, and other debts can also be garnished from your wages.

How Wage Garnishment Works

In most cases, your creditor will need to sue you in court to garnish your wages. Your creditor is different than a debt collector – they are the company or institution that you originally borrowed from.

When your creditors attempt to sue you in court, you will have an opportunity to defend yourself. If the creditor wins a judgment against you, they will also receive a court order to garnish your wages. Unfortunately, after that point, you have no say in the matter.

Depending on your financial circumstances and the type of debt you owe, a determined percentage of your disposable income will be taken from your paycheck in order to satisfy the debt. Once a court order is in place, a garnishment order is automatic. Your employer (or the payroll company your employer uses) will automatically deduct the appropriate amount from each paycheck and then remit it so that your debts are paid down.

Your Options to Alleviate Wage Garnishment

If you’re on the brink of having your wages garnished but have not gone to court yet, here are some of your options to avoid that:

Option 1: Set Up a Payment Plan

When you’ve been notified that a creditor is suing you, don’t wait until the court date to act. Contact them immediately and ask about setting up a repayment plan. Note that your creditor may have no interest in working with you on this, particularly if you’ve had a repayment plan previously and weren’t able to live up to the terms of the agreement.

Regardless of the outcome, a proactive stance is the best idea. It shows that you are willing to make an effort to satisfy the debt without being ordered to do so by the court, which may work in your favor with the judge.

Option 2: Object to the Garnishment

You have the right to object to the garnishment. You will need to do so at the hearing in front of a judge (this is where having an attorney comes in handy). Each type of debt has a specific objection process that you’ll need to follow.

Instructions to object should be included with the hearing notification, so you should know what to do if you intend to object. If the instructions are not included, act quickly. Get in touch with the clerk of the court issuing the documents to request it.

Objections must be based on valid reasons. Be sure you have a solid reason as to why your wages should not be garnished. One example would be if you would experience significant financial hardship because of the garnishment, which you will need to prove.

Option 3: Claim an Exemption

In some states, you’re able to claim an exemption against wage garnishment. This generally applies if you are the primary wage earner in the household and the loss of your income due to the garnishment would endanger your family. In this situation, the judge may decide to reduce the amount or waive it entirely.

Option 4: File for Bankruptcy

For some, bankruptcy may be the only way to get out from under wage garnishment. Understand that this should be your absolute last resort. Filing for bankruptcy has long-lasting impacts on your financial health and should never be considered lightly.


Whether you’re new to dealing with debt collectors or a seasoned debtor, it’s vital to know the rights you have and use them to your advantage. Unfortunately, not all debt collectors have the moral compass we all wish they had.

Despite the rules and regulations listed in the FDCPA, debt collectors continue to skirt the law and do whatever they can to get you to pay them what you owe. When you get a phone call asking about your debt, keep a close eye (or ear) out for any and all predatory practices by the debt collector.

Always remember that you do not have to agree to pay the debt, no matter how pushy or threatening a debt collector may seem. Try your best to keep your cool and come up with a plan that works best for you. You got this!

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