Debt collection: your rights with debt collectors

Did you get a letter, an email or a call from a collection agency? This guide is for you, whether or not the debt is yours. Using what federal law and the Consumer Financial Protection Bureau (CFPB) say, it explains what collectors must tell you, how to dispute in writing, when they can call, what they cannot do, what happens with old debts and where to find free help. It is not advice about your case: it is what the official sources say.

To give you the debt information after the first contact

5 days³

To dispute in writing, from when you receive the notice

30 days⁴

The hours when, in general, they can contact you

8 a.m. to 9 p.m.¹¹

About one debt; more than that is presumed to be harassment

7 calls in 7 days¹²

Who is collecting and which laws protect you

A debt collector is generally a person or company that regularly collects debts owed to others, usually past due: a collection agency, a lawyer who collects debts as a business, or a company that buys past-due debts (a debt buyer). The original creditor is whoever gave you the loan or credit; it can collect on its own, hire a collector or sell your account to one.¹

The main law is the Fair Debt Collection Practices Act (FDCPA), which bans abusive, unfair or deceptive practices. It covers personal, family or household debts; it does not cover business debts and generally does not cover the original creditor collecting its own debt. Most states have debt collection laws, many of them similar, and some do cover the original creditor: your state attorney general’s office can tell you more.² Since November 30, 2021, the CFPB’s Debt Collection Rule has also applied; it clarifies and interprets the FDCPA¹ and is known as Regulation F (12 CFR part 1006).³

A collector can report the debt to a credit reporting companycredit reporting agencyA credit reporting agency, also called a credit bureau or credit reporting company, is a company that gathers information about people and sells credit reports to other businesses. The three nationwide ones are Equifax, Experian and TransUnion. The businesses that buy those reports use them to decide whether to give you credit, a job, a rental home or insurance. There are also specialty agencies, for example for rental history or check writing. The federal Fair Credit Reporting Act (FCRA) gives you the right to request a copy of your report and to dispute information that is wrong.See the full definitionClose, and it then shows up on your credit reportcredit reportA credit report is a statement that has information about your credit activity and current credit situation: your loans and cards, the balances, whether you have paid on time, accounts in collection and who has checked your credit. Credit reporting companies, also called credit bureaus, compile it from what banks and creditors report; your credit score is computed from it. When you apply for a mortgage, the lender pulls your report from the three bureaus. You have the right to see it for free and to dispute anything that is wrong.See the full definitionClose as a collection accountcollection accountA collection account is a past-due debt that the original creditor (the company that gave you the loan or credit) handed to a debt collector or sold to another company. A debt collector is a person or company that regularly collects debts owed to others, such as a collection agency, a lawyer or a debt buyer. The account can show up on your credit report; once you pay it, it should generally show a zero balance as a paid collection. Most negative information can be reported for up to seven years. If you think you do not owe the debt or the amount is wrong, you can dispute it with the collector and with the credit reporting company.See the full definitionClose.¹⁰ But first it has to talk with you, or send you a letter or message and wait a reasonable time in case it was not delivered.¹⁹ Our guide on how to read your credit report helps you find it.

The validation notice: what they must tell you

When a collector first communicates with you, it must give you the validation information: orally in that first communication, or in writing or electronically at that time or within five days after. That document is the validation notice.³ In its first written communication it must also say that it is trying to collect a debt and that any information it gets will be used for that purpose.¹⁷

Under Regulation F, the notice includes, among other things:³

• The collector’s name and the mailing address where it accepts disputes.
• The current creditor’s name and, for consumer financial product debts, the creditor on the “itemization date.”
• The account number, if any, in full or truncated.
• What was owed on the itemization date, what changed since then and the current amount.
• The end date for disputing, and a statement that unless you dispute by then the collector will assume the debt is valid.

Example with real numbers

How the amount they are collecting is built

The notice starts from what was owed on one date and shows, line by line, what changed since then.

Amount on the itemization date

What was owed that day

Interest since that date

Added

Fees since that date

Added

Payments since that date

Subtracted

Credits since that date

Subtracted

Current amount of the debt

What they are collecting today

The itemization date can be the last statement date, the charge-off date, the last payment date, the date of the transaction that created the debt or the date of a judgment.³ If a line does not add up, you can dispute the part of the amount that is wrong.⁵

Run it with your numbersCredit plan

At the bottom, the notice has a response section headed “How do you want to respond?” There you can check that you dispute because “This is not my debt” or “The amount is wrong,” and ask for the original creditor’s name and address.³

How to dispute the debt in writing

From the first contact to verification

1. 1. The collector contacts you

   Day 0

   It gives you the validation information orally or in writing, or sends you the notice afterwards.³

2. 2. The collector sends the validation notice

   No later than 5 days after the first contact

   Look for the end date for disputing: the notice has to state it.³

3. 3. You dispute in writing

   Before the end date on the notice

   Use the response section of the notice or a CFPB sample letter, and keep a copy.⁹

4. 4. The collector stops collecting

   From when it receives your dispute

   Until it sends you a copy of verification or of a judgment, or the original creditor's details if you asked for them.⁵

5. 5. It sends you verification

   Before collecting again

   After that it can keep collecting, but you can keep disputing with the collector and with the credit reporting companies.⁷

You have 30 days from receiving the validation information to dispute in writing; not doing it in writing or on time can affect your rights.⁴ To set the end date, the collector may assume you received the notice at least five business days after sending it; the period ends 30 days after that.³ If you dispute within that period, the collector must stop collecting the debt, or the disputed part, until it sends verification or a copy of a judgment, and it cannot do anything that overshadows your right to dispute.⁵

You can dispute if you think you already paid, you do not owe it, the amount is wrong or the debt is not yours. If you already paid, send copies of your proof, such as cancelled checks or card statements, and keep the originals.⁸

The CFPB publishes sample letters for five situations: you do not owe the debt, you need more information, you want them to stop contacting you, you want them to contact you only through your lawyer, or you want to specify how they can contact you. It recommends using them as soon as possible and keeping copies; even if more than 30 days have passed, it is still a good idea to ask for what you need. The letters are not legal advice.⁹

Send your letter by certified mail with a return receipt, or electronically, and keep a copy. Write down the date, time and what was said on every call, and be careful what you say: apologizing or admitting the debt could be used against you.¹⁰

Not disputing on time does not mean you accept the debt: no court can treat it as an admission.⁶ And if the debt shows up on your credit report, you can also dispute it with the credit reporting companies;⁷ our guide on how to dispute credit report errors explains how to file that credit disputecredit report disputeA credit report dispute is the complaint you make when your credit report has wrong or incomplete information. You have the right to dispute it, and the investigation is free. It is usually done in two places: with the credit reporting company and with the company that supplied the information, called a furnisher, such as your bank, your landlord or your credit card company. You explain in writing what is wrong and why, with copies of your documents. The credit reporting company must investigate, generally within thirty days, and delete or correct anything found to be inaccurate, incomplete or unverifiable.See the full definitionClose.

When and how they can contact you

A collector cannot contact you at an unusual time or place, or one it knows is inconvenient for you. Absent other information, before 8:00 a.m. and after 9:00 p.m. where you are is inconvenient. It also cannot contact you at work if it knows your employer does not allow it, and if it knows a lawyer represents you on that debt, it must deal with your lawyer.¹¹ If it calls at a bad time, you can say so and it must end the call.²

How many calls. A collector is presumed to break the law if it calls about the same debt more than seven times in seven consecutive days, or calls again within seven days after talking with you about that debt.¹² Calls that go to voicemail count, and seven calls in a single day could also break the law. These rules cover phone calls only; texts, emails and social media have other protections.¹³

Messages and social media. Every email or text must give you a simple way to opt out of that channel. The collector cannot post anything about your debt on social media where others can see it.² If you ask it not to use a channel, it can no longer use it.¹²

Your family and your job. It may contact other people generally only to find out where you live, your phone number or where you work, usually just once and without saying it is about a debt. It may generally discuss your debt only with you, your spouse, your parents (if you are a minor), your guardian or executor, or your lawyer. It may ask your employer for your address or phone number, but not tell them you owe a debt.¹⁴

Disputing the debt or asking them to stop contacting you

If it is not yours or the amount is wrong

Dispute the debt

• In writing, before the end date on the notice: the collector pauses until it sends verification.⁵
• You can also ask for the original creditor's name and address.⁸
• After verification, collection can restart.⁷

If you want the calls to stop

Ask them to stop contacting you

• In writing: after that they can only tell you they are stopping or that they may take other action, such as a lawsuit.¹¹
• The debt is still there: they can sue you or report it to a credit reporting company.¹⁰
• If you plan to dispute, do that first, before asking them to stop.¹⁰

You can do both, in that order: dispute first, then ask them to stop contacting you.¹⁰

What a debt collector cannot do

According to the CFPB, harassment includes repeated calls or messages meant to annoy you, obscene language, threats of violence, publishing lists of people who “refuse to pay” and calling without giving a name.¹⁵ A collector also cannot claim to be a lawyer or a government official when it is not, say you committed a crime, say you will be arrested, say it will garnish your wages or bank account, or call its papers legal documents when they are not. It cannot charge fees your contract or the law does not allow.¹⁶ The law also bans threatening action that cannot legally be taken or is not intended, and using a false business name.¹⁷

If a collector violates the FDCPA, you can sue: the court can award the damages you suffered, plus additional damages of up to $1,000, and if you win, costs and a reasonable fee for your lawyer.¹⁸ You must sue within one year of the violation. According to the CFPB, some lawyers specialize in these cases, you can also go to court without a lawyer, and you can submit a complaint to the CFPB and your state attorney general.¹⁵

Old debts: the statute of limitations

A debt generally does not disappear until it is paid. But in many states there is a time limit for collecting it through a lawsuit: the statute of limitations. In most states it is between three and six years, though it can be longer, and it varies by type of debt, your state and the state law named in your contract. Some debts, such as federal student loans, have no statute of limitations.²¹

Once that period has passed, the debt is time-barred and the collector cannot sue or threaten to sue you over it.²² Even so, in most states it can keep asking you to pay by letter or phone. A partial payment or acknowledging the debt may restart the clock. And if you are sued and do not show up to say the time limit has passed, the court can still enter a judgment against you: it is ordinarily up to you to raise it.²¹

If you are sued or face garnishment

If you are sued, the CFPB says to respond, yourself or through a lawyer, by the date in the court papers. Responding does not mean you accept the debt: it makes the collector prove the debt is valid. If you do not respond, the court can enter a default judgment, and with it, depending on your state, the creditor may garnish your wages, place a lienlienA lien is a legal right a creditor holds in your property to make sure you repay a debt. It usually prevents the property from being sold until the debt is paid, and if you do not pay, the creditor may be able to take the property. Your mortgage is a lien on your home: when you pay it off, the lien is released and that shows up in your county's property records. There are other kinds, such as a federal tax lien, which is the government's legal claim against all your property when you do not pay a tax debt.See the full definitionClose on your property or freeze money in your bank account.²³

Most creditors can garnish wages or benefits only after a judgment, and laws protect part of them so you have something left to live on. If you receive federal benefits by direct deposit, such as Social Security, SSI or veterans’ benefits, the bank must protect two months of those deposits. LawHelp.org explains how to claim exemptions. Some government agencies, such as the IRS, can garnish without a court order.²⁴

There may be legal aidlegal aidLegal aid is the free civil legal help that nonprofit organizations and their lawyers provide to low-income people in civil, not criminal, matters. In housing, that includes representing families facing eviction or foreclosure, alongside matters such as custody, child support, protection from domestic violence and access to benefits. In the United States, the Legal Services Corporation, created by Congress, funds a nationwide network of these organizations; its finder points you to the one in your area. Each sets its own income limits.See the full definitionClose offices or clinics in your area that help for free if you meet their criteria.²³ Our free legal aid guide explains how to find them; it is an option, not an obligation.

If this is you

You want the notice in Spanish

If the notice has the box “Quiero este formulario en español” and you check it, the collector must send you a complete and accurate translation.³

The collector is calling your relatives

It can only ask them how to reach you, generally just once, and cannot tell them it is about a debt.¹⁴

You receive Social Security or other benefits

If they are deposited directly, the bank must protect two months of those deposits before freezing or garnishing your account.²⁴

You were served with a lawsuit

Respond by the date in the papers; responding does not mean you accept the debt.²³ Free legal aid is an option.

Real collector or scam?

A real collector can tell you its company name, mailing address and details about the debt. Red flags of a scam include threats of criminal charges, calls late at night or at work, refusing to give an address, a phone number or information about the debt, and asking for your financial information. Ask for the collector’s name, company, address, phone number and license number if your state licenses collectors, and check them with your state attorney general or regulator.²⁵

To confirm it is talking to the right person, a collector may ask for your date of birth, the last four digits of your Social Security number or your address; if you do not want to give your Social Security number, it will generally ask for something else, such as the account number of the debt. Whether to answer is your choice. Never give your bank account, card or full Social Security number unless you know it is a real collector; if in doubt, ask your creditor who it authorized to collect.²⁶

If the debt is yours: how to negotiate

You can talk with a collector even if you cannot pay today: it can help you see your options, and ignoring it usually will not make it go away.⁹ If the debt is yours, the CFPB suggests writing down your monthly take-home pay and expenses, leaving room for emergencies and not paying more than you can afford. If you have several debts with one collector, you can tell it which debt your payment goes to. Get the plan and the collector’s promises in writing before you pay, and avoid companies that charge upfront to “settle” your debts. A non-profit credit counselor can help you build a budget.²⁷ Our family budget guide and the family budget tool help you see what fits each month.

A HUD-approved housing counselorHUD-approved housing counselorA HUD-approved housing counselor works at an agency HUD has approved to provide housing counseling: independent, expert advice customized to your situation about buying a home, renting, a missed mortgage payment, a foreclosure or credit problems. The agencies usually charge little or nothing; many serve in Spanish and offer the homebuyer education course several assistance programs require. They are not lenders or real estate agents and sell you nothing. Your county page lists the official agencies with phone numbers.See the full definitionClose also gives advice on credit issues, often at little or no cost.²⁸

Costly mistakes

• Mistake: Ignoring the letters and calls.

  Instead: Use the notice to find out whether the debt is yours; ignoring it will not make them go away, and they can sue.⁹

• Mistake: Disputing only by phone.

  Instead: Dispute in writing before the end date on the notice; that is what makes the collector pause.⁴

• Mistake: Giving your bank account or full Social Security number to a caller.

  Instead: First confirm it is a real collector; never give financial information to someone you have not verified.²⁶

• Mistake: Making a small payment on a very old debt without checking its dates.

  Instead: A partial payment or acknowledging the debt may restart the statute of limitations.²¹

• Mistake: Paying on a verbal deal.

  Instead: Get the plan and the collector's promises in writing before you pay.²⁷

• Mistake: Not responding to a lawsuit.

  Instead: Respond by the date in the papers; otherwise the court can enter a judgment against you.²³

What to do this week

1. Put the collector’s letters and messages in one folder, and write down the date, time and what was said on each call.¹⁰
2. Find the dispute end date on your validation notice and mark it on your calendar.³
3. If the debt is not yours or the amount is wrong, dispute in writing before that date, using the notice’s response section or a CFPB sample letter.⁹
4. Send the letter by certified mail with a return receipt and keep a copy.⁸
5. Check your credit report; if the debt appears and is wrong, dispute it with the credit reporting companies too.⁷ Organize the steps with the credit plan.
6. If you were sued, respond by the date in the papers; free legal aid is an option.²³
7. If the collector harasses or threatens you, submit a complaint to the CFPB and your state attorney general.¹⁵