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Unless you’ve received a phone call from a debt collector, you probably don’t know much about the debt collection process. 

People get behind on payments and in debt for a variety of reasons, some unpreventable (a lost job or unexpected medical expenses) and some not (bad spending habits). No matter why you’re in debt, you should know what to do if a collector contacts you.

You borrow money from a “creditor” and if you miss several payments, the creditor will change your account status to “charged off.” This does not mean your debt has been wiped away — it simply means the creditor doesn’t think it will ever get repaid. Usually, the creditor will sell your debt to a collector.

Once the collector buys the debt, it will start attempts to contact you. Within the first five days of contacting you, the collector is legally required to send you a written notice that says how much money you owe, who you owe it to and what to do if you don’t think you owe the debt.

So, what do you do when a debt collector starts calling? You can ignore their calls or you can get more information by asking these questions: 

• Who are you trying to reach?

• What is your name and who do you represent?

• What is my address?

• What are the last four digits of my Social Security number?

• How was the debt calculated?

• How will this be reported?

• Can you send me the documents in the mail? 

Don’t give the collector any information he or she doesn’t already know. Debt collectors can call you between 8 a.m. and 9 p.m. by phone. They may also send you letters, emails or text messages. 

Debt collectors can call your work, family or friends to try to find you; however, they are not allowed to discuss your debt with anyone other than you or your spouse. It’s against the law for them to act like someone else, use obscene language, or lie to or threaten you.

Your best option is to write a letter to the debt collector. You have the right to ask for proof of what you owe, to say you don’t owe the money and to tell them to stop contacting you. After you send this letter, the only reason the collector can contact you again is to say they are taking you to court, to say they will no longer try to get you to pay or that they will use another legal remedy to collect (e.g., they will repossess a secured car).


A collector may suggest that you pay back a small amount of the debt, even a few dollars, as a goodwill gesture. But a small payment can lead to big problems. Here’s why: The statute of limitations on collection of a debt is usually six years (sometimes four), but each time you make a payment, that period restarts. So, by making even a small payment on the debt, you extend the six-year timeline when debt collectors can sue you.

If the debt collector takes you to court, you still can defend yourself. You should file a “sworn denial” and go to your court date. By doing this, you’re telling the collector he has to prove he has the legal right to collect the debt and that the statute of limitations hasn’t passed. If the company can’t prove you owe it or it waited too long to file the lawsuit, a judge may dismiss the collector’s case.

If you don’t go to court, the debt collector will win automatically. The collector can then take legal steps to collect the debt — usually by putting a lien on your house, taking your personal property or garnishing your wages.

If you’ve lost a debt collection case, file a claim of exemption, which can protect up to $10,000 worth of your personal property, including money in your bank accounts. If you’re working, collectors can try to garnish your paycheck. To stop garnishment, you must pay the full amount you owe, make a written agreement with the collector who sued you or file a slow-pay motion with the court. 

Finally, some money, like Social Security, is protected by law. As long as the only money you get is Social Security, the collector can’t take it.

Don’t wait until you’re facing a lawsuit to take action about your debt. Know that you have options.

Zac Oswald is the managing attorney of Legal Aid Society’s Gallatin office, practicing Housing and Consumer Law, and the team lead of the firm’s Housing Practice Group. Contact him at 800-238-1443.

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