- What should I do if contacted by a collection agency?
It is important that you respond as soon as possible. If you don’t, the collection agency will keep trying to contact you to collect what they believe is a valid debt. If you legally owe the debt, you should make payment arrangements.
- How do I find out what the bill is for?
Either in the first contact with you regarding the debt or in writing within five days after the initial contact, the collection agency must provide the following information: (a) the amount owed, (b) the name of the creditor, and (c) the process to follow to dispute the bill or receive verification of the debt.
- What if I dispute the accuracy of the bill? What can I do?
You should send the collection agency a written notice that you dispute the bill. The collection agency must stop all communications with you upon receiving your written notice, but may resume contact with you if he/she obtains and sends verification of the debt to you.
- What if the bill was paid or I don’t owe the debt?
If you do not owe the bill, or if the bill has already been paid, send the agency a written dispute along with copies of receipts, cancelled checks and any other information to back up your claim. It is important to send your letter and documents within 30 days after your first contact from the collection agency. Once the agency receives your dispute letter, it must stop further attempts to collect the debt until it sends you a written verification to show that you do owe the bill and the amount of the debt is correct.
- Will I have to pay extra because the debt is with a collection agency?
A collection agency cannot attempt to collect more than the amount owed unless other charges are authorized by the agreement creating the debt and permitted by law. You should review the agreement you have with the creditor to determine if interest charges, late fees or attorney fees are included in the agreement.
- If the debt is from a dishonored check, will there be a service charge?
The holder of a dishonored check or the third-party debt collector collecting the face value of the check may also collect a reasonable fee authorized by the state statutes and applicable sales tax on the fee. Failure to pay the fee can result in lost check-cashing privileges with creditors.
- Can I be sued if I fail to pay the debt?
Yes. A civil lawsuit may be filed against you in the county where you reside. If a judgment is obtained, you may also be liable for court cost and attorney fees.
- Can a collection agency contact my employer?
Yes. But only to verify your employment, verify your business location, and/or determine if you have medical insurance to cover a medical bill.
- Can a collection agency call me at work?
Yes, unless the debt collector knows or has reason to know that your employer prohibits you from receiving such communication and he/she does not have any other address or telephone number to contact you. If you are prohibited from being contacted at work, inform the debt collector in writing, including an address and telephone number where you may be contacted to discuss the account.
- How can I stop a collection agency from contacting me?
If you want to stop all contacts from the collection agency you may request in writing that they do not contact you again. Your letter should be sent by certified mail, “return receipt requested” so you have proof of delivery. Once the agency receives your letter, its collectors can only contact you one final time to explain what action they plan to seek. After that, contact must stop. Remember that if you request no further contact in any way, you may leave the agency with no choice but to file a civil lawsuit against you.
- Must an agency accept partial payments?
No. A collection agency has the choice of demanding the whole amount due or taking payments on the bill. The agency will want to know your actual ability to pay the debt. The agency may establish an amount it is willing to accept and the payment schedule.
- As long as I am paying something every month, doesn’t the collection agency have to take my payments?
No. The agency’s responsibility is to collect the debts assigned to it. The agency will want an agreed plan so it knows when to expect payment and when the debt is to be paid in full.
- What if I can’t keep the payment arrangement I agreed to?
If possible, contact the agency before you miss a payment or send a partial payment and explain the problem and what you plan to do to solve it and catch up on your payments. Many agencies will work with you, especially if you have already made several payments on time.
- What happens to my credit report when I don’t pay a debt?
If the debt goes unpaid, a report may be sent to one or all of the three major credit-reporting agencies, to remain on your credit report for seven years from the date of delinquency. If at a later date the debt is paid, partial or in full, your credit report will be updated to reflect the payment.
Disclaimer: Collection laws vary from state to state. This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Although we attempt to provide up-to-date information, laws and regulations often change. We make no claims, promises, or guarantees about the accuracy or completeness of this information. For legal advice, please consult an attorney.
