How to Handle a Debt Collector

The debt collection process can be scary, but there are things you can do to protect yourself.

Written by Ben Luthi / July 7, 2022

Quick Bites

  • Debt collectors can use aggressive tactics to get you to pay, even if the debt isn't yours or the numbers are wrong.
  • Avoid the urge to ignore a collection agency, especially if it's filing a lawsuit against you.
  • Make sure you understand your rights as a consumer, including recourse options if they're violated.
  • You may need to enlist the help of an attorney or a credit counselor to determine the right steps to take for your situation.

If you've been contacted by a debt collector, you may feel stressed about what's about to come. Debt collection agencies sometimes employ aggressive tactics to get you to pay a debt, even if it doesn't belong to you.

While each situation is different in how you might approach debt collectors, here are some general guidelines to help you ensure that you protect yourself and your finances.

What do debt collectors do?

If you've fallen behind on a debt, your original lender or creditor may try to contact you and attempt to collect payment. But after a certain point—the timeline can vary by lender, but you usually have at least four months—they may write off the debt and send it to a debt collections agency.[1]

Debt collectors buy these debts for a fraction of the original balance, then turn around and try to collect the full amount from you.[2]

While there are consumer protection laws in place to keep collection agencies from taking certain actions (more on that below), they can still be extremely aggressive, calling you daily both at home and work, sending frequent letters and even filing a lawsuit against you to try to get a court to force payment.

Types of debt sent to debt collectors

Credit cardsMay have a shorter statute of limitations in some states than other types of debt.[3]
Student loansWith federal loans, the government can withhold tax refunds, other benefit payments and your wages without taking you to court. It also charges collection fees.[4]
Medical billsWon't be reported to the credit bureaus until one year after they've been sent to collections.[5]
Personal loansThere's typically no collateral the lender can seize for repayment, at least for unsecured personal loans.
Auto loansIf you still owe money after your car has been repossessed, the remaining balance may still be sent to collections.[6]
Bank fees, overdraftsThese may also impact your ability to get a bank account in the future.[7]
Utility billsOn-time payment typically doesn't help your credit but not paying can damage it.[8]

What to do if you've been contacted by a debt collector

If you've been contacted by a debt collection agency, it's important to know what to do and say. Otherwise, you may end up paying a debt that doesn't belong to you, isn't the right amount or is past the statute of limitations in your state. (The statute of limitations is the length of time a lender or collection agency has to collect a debt via a court judgement.)

"They should have your information already and sharing additional info can only hurt you," says Lamar Brabham, CEO and founder of the financial services firm Noel Taylor Agency (NTA). "Don’t give them other phone numbers, email addresses, employer information, Social Security Number, bank account numbers or credit card information."

Lamar Brabham headshot

Meet the Expert

Brabham founded NTA in 1995 but has worked in the financial industry for more than 45 years.

Beyond protecting your information, here are some things you can do to deal with debt collectors.

Don't ignore them

As tempting as it may be, the last thing you want to do with a debt collector is to ignore them. If the debt is valid, you're still legally responsible for it, even if it's changed hands.[2]

If you don't come up with a solution for the debt, the collection agency can file a lawsuit against you. Plus, if you don't respond in a timely manner, it can get a default judgment from the court, which essentially means you'll be forced to pay.[9]

At the same time, don't agree to anything just yet. You'll want to work through some of these other steps first. Don't even say that you plan to pay the debt. If you get repeated calls, plan to record your conversations, so you can use the information later if needed.

While you can request that the collection agency stop contacting you—and they're legally required to abide by that request unless it's to confirm your request or notify you of a specific action it plans to take—you'll still need to come up with a plan to deal with the debt in question.[9]

How having debt in collections affects your credit

  • The collection account will be added to your credit reports in addition to your original debt account

  • Your collection account will remain on your credit report for seven years from the date of the first missed payment

  • Not paying your debt as originally agreed can make it incredibly challenging to get approved for credit in the future

Request verification

Within five days of contacting you, the collection agency must send you a debt validation letter, which provides some details about the debt collections account and some options you have.[9]

Once you receive this letter, you'll want to request a debt verification letter, which includes evidence that the debt belongs to you and that the details of the balance are accurate. If the agency can't furnish enough information, you may be off the hook. At the very least, you may be able to argue that you owe less than what the debt collector claims.[9]

While you wait for the debt verification letter, gather your own documentation to make sure the information the agency provides is accurate. If it isn't, you can dispute it. That includes situations where the debt is past the statute of limitations in your state.

How gather your debt details

  • Check your past billing statements and account history

  • Review past bank statements for payment transactions

  • Contact the original creditor to obtain information about the debt

  • Request your free credit reports via

  • Check the statute of limitations for your state and debt type to see if it's passed

Know your rights

Because debt collectors can be aggressive, lawmakers passed the Fair Debt Collection Practices Act (FDCPA) to dictate what collectors can and can't do.

Collection agencies can contact you frequently in order to pressure you into paying, and they can even threaten to sue you and make good on that threat. However, they cannot:

  • Call you outside the range of 8 a.m. to 9 p.m.

  • Come to or call you at your place of employment (there is an exception to the calling rule for unpaid child support)

  • Tack on extra interest charges and fees unless it's explicitly allowed by the original loan contract

  • Threaten to seize your assets without a court order (the federal government is the only organization that doesn't require this)

  • Impersonate an attorney or government official

  • Threaten to have you arrested if you don't pay the debt or even take legal action if they don't have the authority to do so

  • Lie to you about how much you owe or collect a debt that doesn't belong to you

  • Harass you, including repeated calls throughout the day, threats of violence, the use of obscenities and more[3]

"Merely mentioning that you know your rights will often help change their attitude," says Brabham.

"Don’t let them upset you. Don’t lose your temper," he adds. "A common strategy is to try and make you mad so you get fed up and just pay the debt instead of dealing with the collection agency."


If you believe that a collection agency has violated your rights, you can report them to the Federal Trade Commission (FTC), which is responsible for enforcing the FDCPA, the Consumer Financial Protection Bureau (CFPB) and your state's attorney general.

Try to settle

While collection agencies often resort to suing consumers to collect a debt, the legal process can be costly, so they may be willing to accept a debt settlement instead. This is particularly true if the agency feels that even a lawsuit won't result in full payment because you're unemployed or have few assets.[9] With a settlement, you would pay less than what you owe and get the debt collector off your back for good.

You can negotiate with debt collectors on your own, or you can enlist the help of a debt settlement company or law firm. If you get help, you will need to pay a fee, but the assistance can be invaluable and even increase your savings.

Note, however, that collection agencies typically require full payment of your settlement amount in a lump sum, so if you don't have enough cash right now, ask if it's possible to get on a payment plan or at least delay the settlement until you have the cash in hand.[10]

If a collection agency agrees to a settlement, make sure you get the terms in writing.

Hire an attorney if you get sued

If you receive a summons for a lawsuit, you'll typically need to respond within a set time period.[11] Before you respond, it's a good idea to consider hiring an attorney to help protect you.

"Attorneys know the rules and how to deal with these agencies," says Brabham.

Depending on the situation, the attorney may even be able to help show the court evidence that the agency has violated your rights, which could result in a judgment in your favor.[12]

How to find a debt relief attorney

Pay off the debt

Regardless of the details of your situation, if the debt is valid, find a way to pay it off, with or without a settlement. While damage has already been done to your credit score, newer credit scoring models do take into consideration whether or not you've paid a collection account.[13]

In other words, paying off the debt may help your credit rebound after you've completed the process. Some steps you can take to pay off the debt include:

Article Sources
  1. "When Is It Best to Bypass Debt Collectors and Go Back to Your Original Creditor?" Equifax,
  2. "Should I pay the debt collector or the original creditor?"
  3. "What is the Statute of Limitations on my Credit Card Debt?" Upsolve, July 30, 2021,
  4. "Collection on Defaulted Loans," Federal Student Aid,
  5. "Know your rights and protections when it comes to medical bills and collections," CFPB, April 11, 2022,
  6. "Vehicle Repossession," FTC,
  7. Ben Luthi, "What Is ChexSystems?" Experian, April 18, 2020,
  8. "Does my history of paying utility bills, like telephone, cable, electricity or water, go in my credit report?" CFPB, Aug. 28, 2020,
  9. "Debt Collection FAQs," FTC,
  10. "How Much Will Medical Debt Collectors Settle For?" National Service Bureau, Nov. 30, 2020,
  11. Kathleen Michon, "Creditor Lawsuits: How the Case Begins," NOLO,
  12. "What To Do if a Debt Collector Sues You," FTC,
  13. John Ulzheimer, "Can Paying off Collections Raise Your Credit Score?" Experian, Feb. 2, 2020,

About the Author

Ben Luthi

Ben Luthi

Ben has been writing about money since 2013. He's been on staff at NerdWallet as a credit card writer and for Student Loan Hero, where he covered student loans and other personal finance topics. Ben's work has appeared in U.S. News, The New York Times, Experian, FICO, Credit Karma, Bankrate and more

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