Consumers facing debt collection often mistakenly assume that they have no choice but to pay the debt they are facing. This is in large part due to the communications they may be receiving from the debt collector. Debt collectors only receive payment from the original creditor when the consumer pays on the debt owed, which is why they will say and do anything possible to get the consumer to make payment. However, consumers do not always realize that they have the right to dispute a debt.
Successfully disputing a debt can be an intimidating concept, but it is possible to dispute the debt and win so long as the consumer knows what to say and what to ask when communicating with them.
The first thing a consumer should do when speaking with a debt collector is to obtain the collector’s information, including their company name, address, and phone number. The consumer should not disclose any of his or her personal information, and he or she should be very cautious with what other type of information he or she discloses.
The consumer should also request verification of the debt, including the amount owed, the identity of the current debt holder, and the name of the original creditor, as well as the creditor’s contact information. It helps to use this information to contact the original creditor to verify the debt and the amount owed.
If the consumer wishes to dispute the debt, he or she should do this through a letter sent to the collector’s address. This dispute letter must be sent to the debt collector in the first 30 days after receiving the debt collector’s contact information. Not sending the letter to the debt collector within this time could give the collector the misconception that the consumer validates the debt. The consumer should ensure that the letter is sent via a method that guarantees delivery or at least tracks the mail, showing it was delivered successfully.
Keep in mind that contesting a debt is only possible if the consumer does not actually owe the amount or if it is not legally collectible. If the debt is valid and the consumer does owe the amount quoted, the best choice of action for the consumer is to work with the collector on either a payment plan or debt settlement.
Once the amount owed is confirmed and paid in full or settled with the debt collector, the consumer should ensure that the debt is removed from his or her credit report. It is best if the consumer requests that the account be removed from his or her credit report as a condition of full payment. The creditor is not required to do so, but it is best to at least request this be done.
One of the more common reasons consumers are able to successfully dispute the debt is past the statute of limitations. Many debt collectors assume the consumer is not aware of what the statute of limitations is for various types of debts in hopes that the consumer will make payment on the debt owed and revive the debt. Be sure to verify when the debt first originated, when the last payment was made on the debt and when it become “past due.”
The statute of limitations is four years for debts that stem from oral contracts or revolving accounts, the most common of these being credit card debt. After that point, the creditor is not able to legally collect on the debt, which means the consumer is under no obligation to pay it. By disputing the debt through a formal letter to the debt collector, the consumer will likely be successful. Once seven years has passed, the consumer should then contact the credit bureaus to ensure that the debt is also removed from his or her credit report.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
