What To Do When You Receive A Collection Letter

You've had a long day at work, and just want to get home and relax

. You stop and check the mail before you get home, and see an unfamiliar envelope. When you open it, you wish you hadn't. It's a collection letter from a collection agency-the last thing you need in this economy.

The good news is that you don't have to panic. There are steps that you can take that have been afforded to you by the Fair Debt Collection Practices Act.

Step One: Ask the Collection Agency to Validate the Debt

A collection agency doesn't have the right to ask you to pay a debt until they've proved that you actually owe it. But the burden is on you to make them give you that proof. The collection letter that you received should have told you that if you don't respond within 30 days, they have the right to assume that the debt is valid. That's why it's important that you don't simply ignore the collection letter, but instead respond with a debt validation letter.

In it, you'll need to ask the collection agency to provide you with some sort of proof that you owe the debt. They must provide you with copies of the original debt document, or in some cases, a print out of past statements from the original creditor. If they can't prove that the debt is valid, the collection agency doesn't have the right to continue to try and collect it. Make sure to send the letter certified mail with a return receipt requested so you'll have proof of your request.

Step Two: Check the Statute of Limitations

The next thing you should do when you receive a debt collection letter is to check to see if the statute of limitations has passed on the debt. If it has, the debt collector will still have the right to try and collect the debt, but won't have any legal remedies available to them, such as wage garnishment, liens or lawsuits. The statutes vary from state to state, and are also different depending on which type of debt it is. Check your state Attorney General's website to find out if the debt in question is old enough to have passed this milestone.

Some states will reactivate the statue of limitations if you make contact with the collection agency, so it's important that you get this information before you make your next move. If the statute of limitations has passed, you can simply ignore the collection letter, or you can send the collection agency a letter telling them that the debt in question is past the legal collections stage. Since a debt can be so easily re-aged, many people choose to simply ignore it.

A collection letter from a collection agency can be a scary thing, but if you understand your rights under the Fair Debt Collection Practices Act, you can take control of the situation. Debt collectors hope that you don't know your rights, but stay informed and in control, and they'll be the ones running scared.

by: Sergei Lemberg

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