Understanding debt collection agencies 

Debt collection agencies come in various forms, from large, national firms to smaller, regional operations. They may specialize in specific types of debt, such as credit card balances, medical bills, or student loans. Some agencies are hired directly by creditors, while others purchase delinquent debts from original creditors for a fraction of the cost, hoping to collect the full amount from consumers. 

Regardless of their size or specialization, debt collectors are bound by specific laws and regulations, such as the Fair Debt Collection Practices Act (FDCPA), which outlines their rights and responsibilities, as well as yours as a consumer. 

Identifying your debt collectors 

The first step in unraveling the web of debt collectors is to gather all the information you can about the agencies attempting to collect from you. Here are some effective strategies: 

Review your credit reports 

Obtain your free annual credit reports from the three major credit bureaus (Experian, Equifax, and TransUnion). These reports should list all active collection accounts, including the name of the debt collector, the original creditor, and the outstanding balance. 

Examine collection letters and notices 

Carefully review any written communication you’ve received from debt collectors. These letters should clearly state the name of the collection agency, the creditor they’re representing, and the amount owed. 

Monitor your call log 

Keep a detailed log of all calls you receive from debt collectors, noting the agency name, the caller’s name (if provided), and any relevant details about the debt they’re attempting to collect. 

Check online databases 

Several online databases, such as the Consumer Financial Protection Bureau‘s (CFPB) Consumer Complaint Database, provide information on debt collection agencies and their practices, including consumer complaints and enforcement actions. 

Once you’ve gathered this information, create a comprehensive list of all the debt collectors you’ve identified, along with the debts they’re attempting to collect and any relevant account numbers or reference codes. 

Verifying debt legitimacy 

Armed with your list of debt collectors, the next step is to verify the legitimacy of each debt. It’s not unheard of for unscrupulous agencies to attempt to collect debts that have already been paid, are past the statute of limitations, or are simply not yours. 

To verify the legitimacy of a debt, you can: 

1. Request debt validation: Under the FDCPA, you have the right to request debt validation from the collection agency within 30 days of their initial contact. This requires them to provide you with written documentation proving the debt’s legitimacy, including the original creditor’s name, the amount owed, and an explanation of how the debt was calculated. 

1. Review your payment history: Carefully review your payment history with the original creditor to ensure the debt hasn’t already been paid or settled. 

1. Check statute of limitations: Each state has its own statute of limitations on debt collection, ranging from 3 to 10 years. If a debt is beyond the statute of limitations, the collector may still attempt to collect, but you cannot be sued over it. 

Dispute inaccurate or invalid debts 

If you determine a debt is inaccurate, invalid, or outside the statute of limitations, you can dispute it with the collection agency and the major credit bureaus, requesting its removal from your credit reports. 

Dealing with debt collectors 

Once you’ve identified and verified the legitimate debts you owe, it’s time to develop a strategy for managing or resolving them. Here are some options to consider: 

• Negotiate a settlement: If you have the means to pay a lump sum, you may be able to negotiate a settlement with the debt collector for a reduced amount. This typically requires written confirmation of the settlement terms and a promise from the collector to remove the debt from your credit reports upon payment. 

• Set up a payment plan: If a lump sum payment isn’t feasible, you can attempt to establish a reasonable payment plan with the debt collector. Be sure to get all terms in writing and keep meticulous records of your payments. 

• Get debt relief: If your mounting debt is overwhelming, you might want to consider debt relief. At JG Wentworth, we’ve helped countless individuals resolve their debt through our Debt Relief Program.* In fact, if you have $10,000 or more in unsecured debt, there’s a good chance you’ll qualify and get the JGW advantage. If you think you qualify for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side?