In no way am I advocating that people not pay debts that they truly owe. The purpse of this article is to help you buy time before a collection account appears on your credit report and thwart illegal collection attempts.

Debt collection is an extremely competitive business that often operates on a low margin. If you can make your debt too expensive to collect by tying it up in disputes and challenges, which can be done without the help of an attorney, the collector will focus on easier to collect debts and eventually leave you alone. Keep the attitude that you don’t have to admit to anything and that you’re going to buy all the time you can. Keeping this off your credit report until you can pay it is important because it can be a real fight to get an account removed from your credit report once it is placed. One important thing to remember is that you’re trying to buy time. Nothing is going to change the fact that you do owe the money in question. The goal here is to keep it off the credit report until you can pay.

 Step 1: Get It In Writing. If the first communication you get from a collector is a phone call, ask for a letter. If you got a letter and they call you, say you didn’t get a letter and ask for one. One of the things the collector will say is this: “this as an attempt to collect a debt and any information obtained will be used for that purpose.” Make no comments on the phone except to request that they communicate with you in writing. They are required to communicate with you in writing if you insist on it. Arguing with them on the phone shortcuts the process for them. The time it takes letters to pass in the mail works to your advantage. Don’t get confrontational with the collector. Most of my collectors were moms who were just trying to make ends meet. They’re just doing a job.

 Step 2: Dispute. Steps 2 and 3 comprise your first written communication to the debt collector once you have received their collection letter. Somewhere on the letter will be some version of the following language:

 UNLESS YOU NOTIFY [AGENCY NAME] DIRECTLY WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE THAT YOU DISPUTE THE VALIDITY OF THIS DEBT OR ANY PORTION THEREOF, [AGENCY NAME] WILL ASSUME THE DEBT IS VALID. IF YOU MAKE A REQUEST TO [AGENCY NAME] DIRECTLY, IN WRITING WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE, [AGENCY NAME] WILL OBTAIN VERIFICATION OF THE DEBT OR OBTAIN A COPY OF THE JUDGMENT AND MAIL IT TO YOU. IF YOU MAKE A REQUEST TO THE CREDITOR IN WRITING, WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE, THE CREDITOR WILL PROVIDE YOU WITH THE NAME AND ADDRESS OF THE ORIGINAL CREDITOR IF DIFFERENT FROM THE CURRENT CREDITOR.

 So, dispute it. Be sure to wait at least 15 days from the receipt of the letter; remember, you’re trying to buy time and you have 30 days. Tell the agency in the letter that you thought this was paid and could they please verify the debt. Be pleasant about it. This takes more time for the agency and buys you more time before this is placed on your credit report.

 Step 3: Stop the Calls. In your last paragraph, use the following language: “In accordance with the Fair Debt Collections Practices Act, I request that you never try to contact me by phone at anytime. I request that all of our communication be in writing. I understand that you are allowed by law to call me one more time for the sole purpose of acknowledging this request.” That’s it. Once they receive that request, they cannot, by law attempt to contact you by phone to collect. If the agency slips up and does call you, report it immediately (see How to Report below). Some advisors think it is best if you send this letter Certified Mail, but that’s expensive and you already can’t pay your bills. Send two copies of the letter by regular first class mail. If the agency does not comply with your requests, send a certified copy. This video reinforces why you need to keep the debt collector off the phone:

Step 4: Can you Pay? This process can buy you up to 90 days. If you have saved up the money during that time, or experienced a windfall and can pay, then do so. If the agency has added interest or fees, ask them in writing if they will waive those fees for prompt payment of the principal (original) balance. If the collection agency is still hounding you about the debt, offer a monthly payment if you can afford one, but make sure you get all deals in writing.

 If you cannot offer a monthly payment or pay the principal, you have probably stalled for as long as you can and this account will appear on your credit report in 3-6 weeks. If you are applying for credit somewhere, now is the time to do it before this account shows up on your report. If the account shows up sooner than that (while you were disputing the debt), you can report the agency for listing an account on your credit report that was in dispute.

 A great resource on the FDCPA for the credit layperson is the Wikipedia article on the topic located at http://en.wikipedia.org/wiki/Fair_Debt_Collection_Practices_Act. When dealing with a collection agency, review the prohibited conduct and required conduct sections often and look for ways your collector may have messed up.

HOW TO REPORT

 The agencies listed below are not listed in any particular order. The idea is to use all of them at once and create a paperwork nightmare for the collector. Whatever time you spend filling out these forms and filing complaints, you can bet someone at the agency has to spend five times the effort responding, especially if the agency has past violations.

•  The Federal Trade Commission is the governing body over collection agencies and enforces the Fair Debt Collections Practices Act. Report violations using their complaint form.
•  Write a very brief and to-the-point letter of complaint to your attorney general AND the attorney general of the state where the agency is located. You can search online for addresses and some AG’s even have online complaint forms.
•  The Better Business Bureau is a slow-moving behemoth of bureaucracy; I recently got a letter from them asking about the status of a dispute they resolved for me 2 years ago. Nonetheless, file your complaint with them, especially if they collection agency’s website displays the BBB torch symbol, indicating they are a member.
•  ACA International is the trade association for debt collectors. They have a code of ethics and even non-member agencies can be reported on their complaint form. Member agencies use the ACA logo to gain credibility with their clients. They will not want to lose their membership.

 Collection agencies have a reputation for being able to do things that they really can’t. They cannot sue you, only the creditor can do that. They cannot tell anyone else about your debt. They cannot harass you, and they cannot force you to deal with them. Like the rest of us, they are governed by laws and ethical standards. Know your rights, educate yourself, and buy all the time you can until you can pay your debts.