How to Deal with Debt Collectors: Lessons from My Experience

How to deal with debt collectors

I once got a phone call from a debt collector. And worse yet, I got it at my office. I was completely unprepared for the call that came as I sat at my desk working at my government job. Within the confines of my gray cubicle — right next to my team leader — the collection agent had me trapped. She had called my work phone number to inform me that I owed $3,400 to the last apartment complex I had lived in while in Florida (I had since moved to Texas).

Back in 2008, while living in that apartment, I was laid off from my second post-college job.  Finding myself in a sluggish employment market, I decided that I needed to break my lease and move out of Florida. I tracked down my lease contract and read it closely. It stated that anyone who broke their lease early would owe an extra two months’ rent after vacating.

Fortunately for me, it also stated the lease would be voided after the payment for those two months was paid. I gave my sixty days’ notice around June 1, 2008, moved out on July 31, 2008, and paid my August rent. To my surprise, I was informed by one of the apartment managers that they had found a renter for my apartment starting in September. Under the terms of the contract, this meant that I was only required to pay what had already come out of my bank account. In other words, I was a free woman.

That was the last time I had any contact with the apartment complex. I considered the matter closed, and never thought about it again. That is, until my alleged debt was sold down the river and a debt collection agent called my place of employment.

Primary Creditors Vs. Third Party Collectors

What happened to me was the same thing that happens to many people. A primary creditor (in this case, my apartment complex) attempts to collect on a bill until it no longer makes financial sense for them to do so. They then sell the debt to a third party collection agency. There is actually an entire debt market where anyone who has cash can purchase past-due debts for an amazingly low price: typically 5% of the debt owed (and 2% for older accounts). This also includes charged-off debts, which is debt that is delinquent by at least 90 to 180 days that the lender has decided to treat as uncollectible for financial reporting and tax purposes (note: this means the debt comes off of their books, not yours).

The good thing about having your debt sold to a third party collection agency is that there are specific laws under the Fair Debt Collection Practices Act to protect you from being unreasonably harassed or preyed upon by them. (These same laws do not apply to your primary creditor) The bad news is that collection agencies are notorious for brazenly getting around these laws. Even when they are within their rights — and granted, most of the people they go after do owe money — their tactics and persistence can be vicious.

Legal Debt Collection Processes

A third party collection agency has several obligations to you as a consumer/debtor in order to make their process legal. Here’s what you need to know at each point in the process:

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  • Prior to the First Phone Conversation: Know that the collection agent is allowed to get a copy of your credit report if the amount of debt exceeds $500. This may not sound like a big deal, except that there is a whole lot of personal and financial information available on this report. Your credit report can ultimately be used in your conversation as fodder for why you should pay back your debt (i.e., if they see that you are making on-time mortgage payments, they may ask “Why can’t you pay us if you can pay your mortgage?”).
  • First Phone Conversation: An agent cannot contact you outside of between 8:00 a.m. and 9:00 p.m. In the first phone call, the collection agent is required by law to give you a disclosure along the lines of: “the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose.”
  • After Initial Contact is Made: Within five days of contacting you, the collector must send a validation notice stating the amount of the supposed debt, the original creditor, and the process for disputing the debt. This letter will also include the statement that, “unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.” If the agent has yet to be able to contact you, they are allowed to contact coworkers, friends, neighbors, etc., in order to get your contact information.

Your Rights as a Consumer/Debtor

It is really important to know your rights as the consumer and/or debtor so that you can ensure the collection agency is acting appropriately. Here’s what you should know:

  • How to Dispute a Debt or a Portion of a Debt: To dispute debt or a portion of it, send a letter of dispute via certified mail to the debt collector within 30 days of being contacted by them. In order for them to legally continue with collection after receiving your dispute letter, they must first provide you with proof of the debt.
  • How to Stop Workplace Phone Calls: Collection agencies may not call your place of work if they “know or ha[ve] reason to know” that your employer prohibits calls. So tell them that your employer restricts non-work-related calls (well, if it’s true).
  • How to Cease Collection Agency Communication: A Cease Communication Demand can be made in writing and sent by certified mail. After this, the agency may only contact you to confirm that it has stopped collection efforts, or to advise you that it is pursuing other remedies to obtain payment.
  • Obtain a Credit Report: You can obtain your credit report so that you can see what the collection agency is looking at. You may do this once per year for free through
  • Check Your Statute of Limitation: On unsecured debts, each state sets a statute of limitation for how long someone can attempt to collect the debt by legal means. Each state is different (check out your state’s statute or the statute for the state where the debt was accrued at, but the average is six years. However, know that collectors are trying to get paid, not trying to take you through legal action in order to get the debt. So they are allowed to continue to collect from you even after the statute of limitation has been met; they just cannot take you to court to do so. (And they will not tell you if the statute of limitation has passed)

If I had Known Back then What I Know Now

According to the collection agent who called my office on that day, they had no record of me paying the August rent, or of any of the conversations between me and the property manager. On top of that, the property manager had told her that the renter they found apparently did not move in until mid-October, so they were charging me for September’s full rent and half a month’s rent in October (which I knew they could not do, per the terms of the contract). To top it all off, they threw in a charge of $690 for the discount I had received over the course of the contract when I had been living in the complex.

I disputed all of this in an email (using that form of communication rather than certified mail was error #2 on my part), as directed by the agent. Not only did I not hear back about my dispute, but I did not hear from anyone until a year later… when my debt had been sold to another collection agency. No surprise, the new agent had no idea about the dispute or my previous conversations with anyone (FYI: debt resale of disputed debts is legal, and happens all the time).

Looking back, the mistakes that I made when dealing with the apartment complex and the debt collection agency are crystal clear. Not getting the manager’s approval in writing for moving someone else into my apartment and assuming my lease was Mistake #1. Not keeping copies of my rent payment in August was Mistake #2, and not sending my dispute via certified mail was Mistake #3 (the agent probably told me to email it knowing that she did not have to answer to it that way). To this day, I still have not heard a word from any of the collection agencies that have held this debt, which was supposedly accrued (I still dispute the charges) seven years ago. Nor has it shown up on my credit report, perhaps because of my emailed disputed.

None of their collection practices were illegal, which is true in a lot of cases. But if you are in a position where you have to deal with debt collectors, it’s important to be very aware of what debt collectors can do within the law. For even more on this topic, check out my next article on illegal and unfair debt collection practices, and how you can prevent them.

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  • Edwin Flynn

    Thanks for sharing this information. I have had several calls from credit collectors, although, they were calling for someone else. I’ve told them several times to stop calling but they never listened so I reported them to Callercenter for phone call harassment. Is there anywhere else that I need to go to to file for a complaint?

  • Bill collectors always end up hanging up on me whenever I talk to them. Once they realize that I will not be intimidated and they can’t push me around, they leave me alone.

    • Glad to hear you’re able to stand up for yourself! That’s an important thing to know how to do.

  • Jim

    If anyone reads this, I thought I’d let you know how I handle these vultures.
    First, I never talk to them. I’m not saying you shouldn’t, I just won’t. If you do, make sure you record the exact time of the call, the duration of the call with the time it ended, the name and or badge or ID number of the person you spoke with, the name of the collector, address of the collector and the amount they claim that they say you owe. Also ask for their account number. I would also tell them that you do now want them to call you at home or work at that time and from this point on all communication with them must be in writing. Make sure you note that request as well. Once you state that to them, they must abide by your request. Should they call you again after that, just ask for the same information and tell them you will only respond to written correspondence. After that, I wouldn’t talk to them again but I would record the number of times their number shows up on the caller ID. You’re building a case just in case one of them decides to sue you.
    If you haven’t received any written correspondence from them, once you stop talking to them, they will send you a statement usually with the original creditor information, the creditors account number and their account number. They will say if you don’t respond in 30 days they assume that this debt is valid.
    At this time, respond with a validation of debt letter. The one I use has very specific questions which they cannot answer because they just purchased the debt, they are not the original creditor. When you send this, send it certified with electronic return receipt so you can print that and have it for your records. Again, you are building a case should they decide to sue at some point. Once they have signed for this, they are required by law (Fair Debt Collection Practices Act) to stop all collection actions until they provide the information you requested. Usually, but not always’, you will get no response because they can’t provide the information you requested and the debt will probably get sold again and you’ll here from another one down the road. If they don’t respond with your requested information but continue collection actions via either phone or mail, keep track of all that and don’t throw anything away. They are now in violation of the law and you can counter-sue should it come to that. If they send you some credit card statements, consider this a non-response because the validation letter asks for very specific information for you to consider the debt valid with them. You can do this over and over and eventually the letters and such will just stop coming most of the time. I have used this perfectly legal method with debt collection attorneys’ as well with the same success.
    There are a few companies that may sue. One is Midland Credit Management, Portfolio Recovery Group, Harvest Credit Management III and a few others. I had Midland Credit Management and Harvest Credit Management III sue me. I had both cases dismissed filing all the paperwork myself. I have specific items you need to file with the court and their attorneys, should they decide to sue you. In regards to the Midland Credit Management case, since I kept records of everything they sent me I counter-sued them for violating the law after I requested (3) times for validation of debt and they never responded but continued collection action. Their lawyers are big collection attorneys’ here in southeast Wisconsin and even do work for the city of Milwaukee to collect for them. They asked to dismiss the case before the second court date. I agreed. Be sure to have them agree to dismiss the case with prejudice because they can’t sue you for this account again if done that way. The Harvest case was dismssed (4) days before trial. Caution: This only works for unsecured debt and against debt collection agencies and third party debt collectors. DO NOT try this against aut loans, mortgages, credit card debt where the original creditor is coming after you and any other secured debt. Just call those folks and work something out. You don’t need to pay a credit counselor to do this for you. I had (2) accounts with CITI cards and got 0% interest for five years. If it’s the original creditor, sometimes, you’ll need the account to get to the point where they are threatening legal action, usually about 9 months to a year, before you’ll be able to work out a sweet deal. You’re credit has already been crushed, so just wait and they will work with you. Don’t ignore the original creditor, they will sue you eventually.
    All this applies only if you don’t want to declare bankruptcy.
    In closing, I’m not advocating not paying what you owe. What I’m saying here is these debt collectors buy the debt for pennies on the dollar, use fear and intimidation to get you to pay as much as possible and if you let them will make you miserable. DON’T FEAR THEM. Use the law to your advantage and keep them in line. Their system isn’t designed for conflict, it’s designed for profit, and tons of it. Be informed and use all the legal means you have to not pay them since you don’t owe them. They took the risk to buy the debt, the debt was charged off, you don’t owe them. If you want to pay it, pay the original creditor, not them.
    If anyone wants a disc with the validation of debt letter I use and a copy of the Fair Debt Collection Practices Act, email me and I’ll let you know how you can get those. If you have a collector that has turned things over to a local attorney who is threatening suit, or has just filed suit against you, let me know and I can send you the docs I use to respond and more than likely have your case dismissed without ever going to trial. Just send your contact info to:
    All the best!

    P.S. I am just a regular guy who has had it tough over the last few years, not an attorney, and this is not legal advise, just relaying my experiences with these vultures and what I use LEGALLY to fight and win against them. Everthing is done above board and according to my rights under the Fair Debt Collection Practices Act. If you don’t know the law, you’ll get rolled over by these people!

    • Good for you! I was sued last year for a $1600 revolving charge account that I never paid due to shoddy materials being used and false misrepresentation of the product I purchased. Everyone told me that I would not win my battle against someone who went to law school but I fought the case and won. It was dismissed in less than 30 days after filing my answer with the court. It cost me $225 to file my answer to the summons but that beats having a $1600 judgment against me any day!

    • justin

      Hi my name is justin great information also let u know if u have a smart phone a andriod there is apps out there that let u record your phone calls but first check your state law I use auto phone record I love it if your state says you can’t record your calls with out there permission there are ways around theses laws if a bill
      collector Calls you or you call them and they have a pre recorded message saying this call may be recorded or may be used for training purposes You don’t have 2 tell the bill collector you are recoding the call because they donot have a reasonable expectation of privacy I use this to my advantage


  • Great article and thanks for sharing this great information.When dealing with debt collectors, you have plenty of rights, thanks to
    the Fair Debt Collection Practices Act. The Fair debt collection practices ac gives the collector some rights, too. A debt collection firm can renew
    collection activities if it provides you with proof of the debt, such as
    a copy of the bill you owe.

  • Vishnu

    I had a debt collector contact me in spite of me having given my previous apartment my permanent forwarding address. They then sent me an itemized bill upon my request. The charges were not justified (e.g. they replaced the entire kitchen counter and wanted us to pay for it – I had paid $200 for professional cleaning and they wanted to charge me for deep cleaning the bathroom when it had been cleaned professionally! It was spotless and I had pictures to prove it).

    So I disputed the charges and sent it by certified mail to both the apartment complex as well as the collection agency (and told them that I would only correspond directly with the apartment, so they’ve ceased all contact now). I also sent them pictures that I took after the professional cleaners were done as well as the receipt for what I paid them. It’s been over a month and nobody from the apartment has contacted me about the dispute.

    My question is – what do I do if I don’t hear from them in the next couple of months? I’m planning to move to another apartment soon and I don’t want to keep giving these people my forwarding address and just want to be done with them. What would your advice be?