3 debt collection horror stories

There are two things you can do:

  • Call a local credit counseling agency affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. Or, you can call your state attorney general's office to see what your rights are and which assets are protected in your state.
  • Ask the collection agency for its contact information and proof of the debt in writing. The debt collection law requires them to comply. Tell them you want them to send you the agency name, contact address and phone number, the debt amount, the original creditor, the date of the original debt, and when and how the company acquired the debt. Not only will it help you research the debt's validity, but it will buy you time, Hicks says.

'We'll make you a deal!'

A Pennsylvania man opened his mailbox to find what sounded like a great offer: Automatic debt settlement from a collection company, offering to take just $800 for his $1,100 debt. He threw it out.

That was a smart move because it was a disputed debt from years before. The original creditor already had acknowledged that it wasn't the man's debt, says Garrett. It's not uncommon for old debts to expire. They also can be discharged in bankruptcy or settled.

In addition, states have time limits on how long a debt collector can legally pursue old debt, so it pays to see if that time has passed. If it has, you can't be forced to pay the debt. If you don't know if the debt is still valid, ask the debt collection company for proof of the debt and contact the original creditor about its current status.

For consumers, knowledge is real power. "If you're savvy and understand what you can do to keep it from getting aggressive, you're in a better position as a consumer," said Hicks.

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