Debt Collectors

“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.” -Ogden Nash
Some debt collectors will do anything to collect from you including harassing your family, friends, coworkers, etc. But you have rights.

The Consumerist features several useful posts.

Let's begin with a sample letter that one should send immediately after first being contacted by a debt collector: http://consumerist.com/2007/07/sample-letter-for-disputing-a-debt-collection-notice.html

The letter asks for four things:

* (1) the amount of the debt;
* (2) the name of the creditor to whom the debt is owed;
* (3) Provide a verification or copy of any judgment (if applicable);
* (4) Proof that you are licensed to collect debts in (your state)

The letter goes on to mention...

* because I have disputed this debt in writing within 30 days of receipt of your dunning notice, you must obtain verification of the debt or a copy of the judgment against me and mail these items to me at your expense;
* you cannot add interest or fees except those allowed by the original contract or state law.
* you do not have to respond to this dispute but if you do, any attempt to collect this debt without validating it, violates the FDCPA;
...
Should you pursue a judgment without validating this debt, I will inform the judge and request the case be dismissed based on your failure to comply with the FDCPA.

What is debt validation? The collection agency needs to prove that they own the debt. They can claim that the debt was sold to them but you have the right to ask them to prove it. Often the proof is flimsy or wrong. There are many stories now of mortgage factories signing fraudulent papers assigning mortgage debt for illegal foreclosings.  The Consumerist recently featured a story of a of a collection agency forging the signature of a dead woman thousands of times to establish validation of ownership.
http://consumerist.com/2011/01/dead-woman-tried-to-collect-on-thousands-of-debts.html

Another debt right to be aware of is the Statute of Limitations. A company can not appear out of the blue and say you failed to pay a debt from 20 years ago.  Well actually they can (and will) say it, but will very likely lose in court if you challenge them. Each state has its own limit on when debts expire. See http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml for details.

Bottom Line

Search the Internet to know your rights. Read the Fair Debt Collection Practices Act at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

But if legal language makes your head spin, the FDCPA is explained here,
http://en.wikipedia.org/wiki/Fair_Debt_Collection_Practices_Act
and here
http://www.expertlaw.com/library/consumer/fair_debt_collection.html
and here
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm