Home Finance How To Get Your Debt Out Of Collections
get your debt out of collections

How To Get Your Debt Out Of Collections

by Martha Simmonds

Ah yes, the dreaded debt collection call. Seems they always know exactly when contacting you will inflict the most anxiety. Of course, all debt collector calls have the potential to incite anxiety, so maybe that’s what’s going on there. At any rate, hearing from credit card companies’ and debt collectors in general rank slightly above stepping into a hill of angry fire ants on the desirability scale. With that in mind, here’s how to get your debt out of collections.

Don’t Let Them Blow Your Smooth

Take the call, listen calmly but do not accept responsibility for the debt, in any form whatsoever. Do not raise your voice, use profanity, or display emotion of any kind whatsoever. Keep it chill.

Further, do not agree to consider a payment plan. Do not offer to make a partial “good faith” payment. Do not accede to the premise that the debt is yours in any way. You could inadvertently accept responsibility for a debt you do not owe, or for which you cannot be sued.

Tell them, “I have no recollection of such a debt,” even if you believe it’s yours.

Continue with, “However, I do want to get this straightened out. Please forward me any documentation you have in that regard. I’ll need to see the name and address of the person who incurred the debt. I’ll also need to know the creditor with whom the debt was incurred.

Please also provide me with the original loan amount, the interest rate associated with the loan, the amount of the last payment made and the date it was made, along with the current amount due.

Of that amount, I will also need to know how much of it interest, how much is fees and the amount of the outstanding principal balance. I also request that you refrain from contacting me again, while we get this sorted out.”

This last line is how to stop debt collection calls, while you get everything straightened out.

A legitimate collector will have the ability to provide that information within five days. If they ask you to send that request in writing, do so, using a template like the one you’ll find here.

Review Your Credit Report

While you’re waiting for them to respond, go to AnnualCreditReport.com and download all three of your credit reports. Study them carefully to find the debt they’re alleging you owe.

You might find someone stole your identity, incurred the debt and never paid it. Another possibility is they’re mistaking you with another person of the same name and the debt does not appear on your credit report.

File A Dispute

If in fact the debt is not yours, send a dispute letter to the collector; explain why you believe you’re not responsible for the debt. If it’s due to erroneous information on your credit report, send that letter to the credit reporting bureaus as well.

The credit bureaus are required by law to investigate the situation to ensure the veracity of the entry. If it isn’t yours you’ll likely be home free. There is also a possibility that the statute of limitations for legal action against you has kicked in.

This is why you need to know the date of the last payment. It is also why you should not go on record as accepting responsibility for the debt, until it is proven to be valid. You will restart the clock on the debt if you accept responsibility for it in any way.

Further, this will usually put a stop to scammers as well, because they know they can’t get anywhere with you.

Keep copies of all correspondence between you and the company, both incoming and outgoing.

If The Debt Is Valid

Once the collector has proven the debt is yours unequivocally and you’re satisfied the statute of limitations has not run out, the only way to get the debt out of collections is to pay it off.

You can negotiate a payment plan, pay it in full, or seek professional debt settlement help. Freedom Debt Relief can provide you with good assistance in that regard. Whatever you do though, be certain you can follow through with any offer you make.

Remember too, even if the statute of limitations has expired, you do still owe the debt and it will remain on your credit report until it times out. (The duration varies from state to state. Check the consumer laws in your state to find put how long that will be.)

You may also like