Have you ever found yourself in this scenario?

A third-party debt collector calls and alerts you to a bill that’s been handed over to them. You might already be aware of the bill’s delinquency, or it might be news to you. Perhaps it’s:

  • A bill, however small, that was forgotten or missed and it’s now been sent to collections.
  • A one-time expense like a trip to the hospital that wasn’t covered by your insurance. The amount is enormous and it overwhelmed your budget so much that you are just unable to pay it off.

These situations aren’t always a sign of poor financial management, as they happen to the frugal and financially responsible too. There are two extreme responses to this situation: people who fight debt collectors tooth and nail regardless of whether they owe the money, and people who cave to manipulative collection tactics and end up in even worse financial straits. The keys to dealing with legitimate debt collection lie between these two, though.

Key #1: Know Your Rights

Just because a debt is legitimate doesn’t mean you’re at the mercy of a collector’s shady efforts to retrieve payment and collect a commission. The Fair Debt Collection Practices Act provides federal guidelines for what debt collectors can and can’t do to get paid. Familiarize yourself with its important points, including:

  • Restrictions on when and how a debt collector can contact you.
  • Who they’re allowed to talk to, and what they can and can’t say.
  • Your right to a written statement within 5 days of contact, and another 30 days to request written proof of the original creditor and debt amount.

If you need further help understanding…

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