You struggle to pay your bills and you hope this paycheck will be enough. Then you see something in your mail that makes your heart sink: an aggressive debt collection letter demanding immediate payment.
How will you pay? Do you have to declare bankruptcy? Will your house and possessions be repossessed?
If you’ve received a letter like this, don’t panic. You have options and rights.
Don’t let debt harassment rush you into making a poor financial decision. Read these 5 facts and learn what your options are so you can make an informed decision.
1. Do Not Pay Until You Get More Information
It’s possible the collector is attempting to collect a debt that no longer exists. Collectors have a limited amount of time, called the statute of limitations, in which to collect a debt. If a debt is past the statute of limitations, it expires and you don’t owe it anymore.
The statute of limitations varies from state to state but usually lasts 4 to 6 years after the last payment made. Because the limit is based on the last payment, sneaky debt collectors may try and trick you into making payment on a debt you no longer owe. If they succeed and you make a payment, you will reactivate the debt and once again owe it in full.
2. The Debt Collection Letter May Be a Scam
The collector may be a scammer asking you to pay a debt that never existed. Never take a debt collection letter at face value. Always contact the collector and request more information, such as name, company, phone number, and address.
Ask them to send you the complete, detailed debt statement to verify if it’s legit. Make sure it includes when it started and the last payment made. Then use this chart to find out the statute of limitations for your state.
3. Know Your Rights
There are strict laws about how collectors are allowed to treat you. Knowing your rights gives you some powerful options to reduce debt harassment.
For one thing, they are legally required to stop calling you if you send a letter asking them to do so. You also have 30 days to dispute the debt, which requires them to investigate and verify that you owe. If it is legitimate, this at least gives you more time before you must pay.
Other rights include:
- You can’t inherit someone else’s debt unless you cosigned on it
- You can’t be arrested or jailed for owing money
- Collectors are not allowed to threaten jail or arrest
- If you can provide proof, you can sue collectors for violating any of these rights
Keep a record of all collection communications as proof in case collectors are acting illegally. Know your rights and you can fight back.
4. Consult with a Legal Expert
Contacting a debt settlement company for a free analysis is a good way to determine your course of action.
You’ll be paired with seasoned attorneys that are state bar licensed and experienced in dealing with debt-related issues. They’ll analyze your situation and advise you on what to do next with no upfront costs.
5. The Collector is Probably Willing to Settle
Often, the creditor you originally owe will sell your debt to another company for mutual benefit. There’s a high chance your debt has already been purchased by another creditor for a good deal. That’s great because it means your current creditor probably doesn’t need full payment to profit from your debt.
Besides, what good would it do them to demand full payment from someone who can’t pay it? If they work with you to settle upon more reasonable terms, they’re more likely to receive adequate payment sooner. If the debt you owe is legitimate, there’s a good chance you can renegotiate.
You Have More Power Than You Think
If someone is treating you unfairly or unreasonably, it’s probably illegal. Know your rights, use your rights, and fight back.
Need more help? Contact us for a free debt analysis today.
The Effective Legal Debt Solutions team is comprised of caring, seasoned professionals with years of industry knowledge coupled with personal real-life experience of dealing with debt settlement situations that many of our clients are facing today.