Know Your Rights When Dealing With Debt Collectors

I recently had to start dealing with debt collectors because of an error with a company that we paid money to. Let me tell you, it was a horrible experience. The bill was for something I had paid a year previous to receiving the letter from the bill collector. Even though it was an error,…

Michelle Schroeder-Gardner

Last Updated: October 24, 2017

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I recently had to start dealing with debt collectors because of an error with a company that we paid money to.

People dread dealing with debt collectors, whether it's an mistake with the bill collector or if it's a legitimate bill that was never paid.Let me tell you, it was a horrible experience.

The bill was for something I had paid a year previous to receiving the letter from the bill collector. Even though it was an error, I was able to learn a lot about the debt collecting process, especially because it was my first time dealing with a very aggressive debt collector.

Like I said, the bill was an error, but that didn’t mean the harassment stopped.

The bill collector didn’t want to believe me, and instead, they bullied me like crazy. They wouldn’t give me the phone number or any contact information for the company who had turned the bill into the debt collection agency, so I didn’t really know a ton of information about what it was for or anything like that.

After spending hours tracking down where the bill was from (that was a disaster in itself), it turned out the company that issued the bill simply forgot to mark it as paid.

But, that didn’t stop the bill collector.

I was told by the credit collection person that they would make sure my credit was wrecked unless I paid the bill, which I already had! They yelled, bullied, and harassed me, to the point where I was shaking because I was so furious that they could treat a person like this.

It was all a disaster, and the bill collector gave me a ton of incorrect information and was behaving very unethically.

I really don’t know how a person can sleep at night after acting so horribly.

So, that’s why I decided to create this article so that you can know your rights when it comes to dealing with debt collectors. Whether you are actually late in paying your bills or if it’s an error, you still have rights when it comes to dealing with debt collectors!

Here are my tips for dealing with debt collectors.


Understand what debt collection is.

The first step in dealing with debt collectors is understanding more about debt collection and exactly how it works.

If you have a debt that is unpaid, such as 30 days or longer after the due date, the original company that you owe the debt to may sell your debt to a third-party debt collection agency. This allows the original company to still make some of their money, while no longer going through the process of trying to get you to pay your debt.

If you have a debt in collections, it is something that you should be concerned about. It is possible for the debt to be listed on your credit report, and it can hurt your credit score.

This may hurt your chances at getting a low interest rate on a mortgage, being approved for a credit card with a high cash back bonus, and so on.

Due to that, you should figure out what your next step will be when dealing with debt collectors, instead of just completely ignoring the bill collector. Sadly, many people just throw away the letter or ignore the phone calls, and that is exactly what you do NOT want to do.

Note: Do you know what your credit score is? You can check it for FREE with Credit Sesame!


Know your rights when dealing with debt collectors.

The Fair Debt Collection Practices Act is enforced by the Federal Trade Commission and it “prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.”

The Fair Debt Collection Practices Act covers debts that you may have, such as from a credit card, a medical bill, a car loan, and so on. They only cover personal debts, not anything deemed as business-related debt.

Your rights under the Fair Debt Collection Practices Act state that a debt collector can only contact you at certain times, such as during normal daytime hours unless you agree upon different timing with the bill collector. Meaning, they can’t call you at 2 a.m. without your permission.

They also cannot contact you at work, unless you tell them that they can.

A bill collector can contact you in many different ways, such as by phone, a letter, email, or even a text message on your cell phone.

The bill collector does need to tell you certain things about your debt, such as:

  • They must send you a written notice within five days of first contacting you.
  • How much you owe.
  • Who you owe the money to.
  • What to do if you think it’s a mistake.

If the debt in collection is actually yours, then you may want to negotiate. Most debt collectors are willing to negotiate the fee, so you may as well ask and try.


Debt collector harassment is prohibited.

Debt collectors are known to harass people, which is actually not allowed. Also, they cannot harass any other parties they may try to contact when collecting your debt.

Debt collector harassment includes:

  • Threatening to harm you.
  • Using profane language.
  • Calling you repeatedly.
  • Calling you at work if you ask them not to.
  • Making false statements, such as claiming that they are an attorney if they are not one.
  • Claiming that you have committed a crime if you have not done so.
  • They cannot say that you will be arrested.

And more.

I’ve heard stories of debt collectors calling people hundreds of times a week, harassing their friends at work, showing up at a person’s work, and so on. However, that is not allowed and is prohibited. And, this is why you should know your rights when dealing with debt collectors – because you do have rights, even if you owe the debt!


Can a bill collector contact people I know?

A bill collector is allowed, in some instances, to contact other people about your debt, but only if they are trying to figure out where you live, your phone number, or where you work.

They cannot, however, contact people you know more than once. I’ve heard of debt collectors contacting someone’s friend or extended family member at work repeatedly and annoying that person, and that is not allowed.


What to do if it’s an error.

Before you pay or negotiate a debt that is in collection, you should be 100% sure that it is actually your debt to pay. In some cases, it may be debt from someone that has a similar name to you, it may be debt that you’ve already paid, and so on.

Like I stated above, I was contacted and it was an error.

However, that didn’t mean the harassment stopped.

Instead, I was told by the credit collection person that they would make sure my credit was wrecked unless I paid it. They even yelled, bullied, and harassed me.

According to the FTC:

If you send the debt collector a letter stating that you don’t owe any or all of the money, or asking for verification of the debt, that collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.

For me, I had to contact the original company and have them contact the debt collector. It was a process that took pretty much a whole work day of me being on the phone, and I was close to just paying the bill because it took so much energy and effort to get the collector to stop.

However, after the bill collector started harassing me and giving me incorrect information, I didn’t want that person to win, so I made it my mission to prove them wrong.

And, they were wrong.

I’m still waiting on the apology (haha!) but, at least, I don’t have to pay the bill twice.

Because errors can happen when paying bills, it is important to keep records of your bills, when, and how you pay them. If you can look back at your records, it can help you streamline this process should it ever happen.

Have you ever had to deal with debt collectors? What other tips do you have?

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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. Ember @ An Intentional Lifestyle

    While I haven’t personally had to deal with them, I know many people who have. If you get one that has any sense of decency, they will help you out and let you set up a plan to pay what you can afford. But IF is the key word. I’ve only heard of maybe 1 or 2 people that managed to not get a jerk one that chewed them out.
    These are great, and greatly needed, tips!

    1. Yeah, the person I had was a jerk. They did NOT realize who they were talking to at all – I am a personal finance expert after all so I was appalled by the way they were behaving.

  2. Thank you for sharing your experience and the helpful information.

    I don’t recall dealing with a third party or outsourced debt collection agency in our past. But we have definitely seen that a number of legitimate businesses do include details about the 30 day process you referenced.

    I’m sure it was very frustrating when you weren’t sure which company / specific bill was in question – that can be difficult to narrow down depending on so many variables. As you mentioned, the debt collection agency is also not making it any easier.

    1. Yeah, the person isn’t allowed to do that. They broke many laws.

  3. Dave @ Run The Money

    Michelle, I haven’t been necessarily bullied by debt collectors, but I’ve refused to pay the original company due to horrible service. You have to some kind of sociopath to treat people like that, but these types of collectors (some, not all) are incredibly ruthless. Their only true tactic is do bully and harass people into payment. Completely unethical and sick.

    With my situation, I tried to a cancel a television subscription I had because of how incredibly bad the service was. They charged me a non-refundable $400 installation fee, which they neglected to tell me about and had me sign electronically when the installer came out agreeing to this.

    I was told I was agreeing to the fact that he installed the TV equipment and not that I was agreeing to this non-refundable fee (I would never have done so if I had to). Long story short, I was incredibly dissatisfied with the television service as well as this whole process. In trying to cancel it, I was told I was locked into a 2-year agreement (again never told this). I refused to pay it out of principle, it went to collections, and I settled for half the amount with the collection agency.

    Customer service these days … it’s just not there in most cases!

    1. Yes, completely unethical. I don’t know how some people sleep at night!

  4. Bil collection was onne of my jobs when I was a college student.

    It was a high pressure, anything goes environment.

    So my advice is if you make a settlement, make sure you get it in writing before making the payment.

    For example, if they tell you to pay only half, and that they will forgive the other half, make sure you get the agreement in writing through email or letter, before you pay that 50%.

    Otherwise, they might pretend the agreement never happened and continue pursuing you for the other half.

  5. Probably not the best experience with the debt collector, So sorry to hear that. I personally didn’t have any of those experiences but a person I am familiar with had to face some issues regarding a debt which he already paid. It was a horrible experience.
    Long story short, he was mistaken for another guy with the same name.

      1. Audrea Henderson

        I have a company doing the same thing to me I have a similar name to the person they are looking for our last names are different. But they are calling me an average of every other week I have told them I am not that person and the collector accused me of lying about who I was and that it was a criminal offense for me to say I’m not her when I’m not I started out as nice with I’m not her but I know her I told them all I knew about her since we worked together 5 or 6 years ago and they will not stop. Any ideas on that?

  6. Wow, that’s terrible!! I am so glad I’ve never had to deal with debt collectors, even when I was in debt! Now I’m debt free and never want to go back. It’s like being in prison!

    1. It wasn’t even for “debt” like I think you are thinking. It was just a bill I received that they thought I didn’t pay.

  7. Laura

    I have little to no respect for people who are debt collectors. My grandmother passed away in 2001. Years later (probably 5+ years), my father (her son-in-law) got a call from a debt collection agency insisting that he either give them her address or else. When he explained that she had been dead for several years, they told him he had to send them her death certificate to ‘prove’ it. I believe he then told them that what they were doing was illegal and if they called again, he would take legal measures to make sure they stopped. Either way, he never heard from them again.

  8. John

    Glad to see you solved your problem, but it doesn’t stop the collection agency from abusing other people.
    Is there any recourse against them?

    1. This is why I published this article – so that people know their rights and how to deal with debt collectors.

  9. James @ Penny Wise Dollar Wiser

    Wow – that’s terrible. Sorry you had to go through that.

    Thankfully I never had anything go to collections, even erroneously. But will know what to do now if it ever does happen to me and what are my rights – thank you!

    I certainly did not know about the FTC’s Fair Debt Collection Practices Act, so it is comforting to know that the government stepped in to prevent harassment and unethical practices to collect on outstanding debts.

    I’ve heard stories of debt collectors taking things over and beyond what it should be, I am sure they deal with deadbeats with no intentions of ever repaying their debts but they need to remember that not everyone is like that and some folks have every intention of paying but is just struggling a little bit or just simply overlooked a bill accidentally. Or in your case, where you do not even have an outstanding debt or bill. Wow – that’s crazy!

  10. Kareen Mills

    Save yourself a lot of hassle and time wasted. A simple phone call to your LegalShield attorney would have changed the game and avoided all the stress! We’ve owned the service for a quite a while and have saved a million hours dealing with non-sense stuff just like this! We’ve owned it for both our business and family coverage for on-call legal protection since 2009. I personally wouldn’t run my life and business without it. It’s a very minimal monthly fee with a HUGE impact!! It’s the lowest bill in the household yet holds the rest of them accountable. In 2014, I joined the business because it’s saved us a ton of headache and money for the last 5 years as a customer. Let me know if you have any questions.

  11. Alan Oncken

    All you need to do is send a certified letter requesting no further contact. Hope it helps.

  12. Samantha

    I’ve had mostly decent experiences with debt collectors but the collection company I had was terrible about being proactive.
    My ex and I both signed for a new car and in the divorce agreed to split the loan. My ex lost all his income and then refused to pay for his half. The car was repossessed and I was the only one getting collection calls. I politely reminded the collection company that the debt was to be split between my ex and myself but they held little regard for that arrangement. I was the primary signer so I was the person “primarily” responsible.
    I encouraged the company to reach out to my ex and gave him the most recent information for him had. Their attempts to contact him were pitiful, to say the least, and as far as I know, there have never been able to contact him. All of this finally forced me into bankruptsy. Maybe NOW they’ll try harder to get him to pay his half?

  13. What Happens If You Don’t Pay a Debt Collection ?

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  15. Tyler DeBroux

    Phone calls from debt collectors can really catch you off guard, especially when there was an error. I kind of went through a similar situation earlier this year when one of my rental properties had been vacant for a few months. I had set up automatic payments each month for the utilities, however there had been a technical error. A couple months later I started receiving phone calls one day stating I owed money and that it was going severally hurt my credit if I didn’t pay. I paid it immediately along with four months of late fees. Lesson learned though about setting up automatic payments online lol.