We would first like to mention one should always try to pay their debts. We also feel it is your best interest credit report wise and for your reputation to pay the originator of the debt. This is best for your credit report, credit score, and general reputation. Still, there are many times that debt is unqualified, unfair, unverified, invalidated, created under false pretenses such as no upfront pricing or you just can’t pay it. What are your options after that? Let’s be realistic no one has the time or money to take every bad customer experience to the court.
If a debt collector is from your state, he has much more options to address this debt if you were not to pay. He may even choose to take you to court. Always take more caution with debt collectors in your state. They can begin to raise the price of what you allegedly owe. Our advice with in-state debt collectors is to never throw the letter off to the side (or any debt collector). Our advice is to respond immediately to ask for proof of license, verification of the debt or a reason and proof why you do owe the debt. Responding to the debt collector immediately is always in your best interest.
Some debt collectors have often attempted to say that the Fair Debt Collection Practices Act does not require them to provide verification of debts after their first letter. This is not true, always demand verification and state that you will not pay until the said debt is verified. If the debt collector can’t verify it with you, how could he do it in a court of law? If the debt collector refuses to provide validation or verification of the debt, send him a letter denying him payment based on that.
You should always require the debt collector to prove the debt is yours. You should also ask for a copy of his license to collect debts in your state. If the debt collector does not have one then he may not legally collect debts in the state of Utah. If he is from out of state, he will most likely not have a license for the state of Utah. Sadly in Utah, the requirements to be a debt collector are rather low but licensure is still a requirement. In some other states, the requirements might be even lower. Our custom template letter for out of state debt collectors can be located here.
After asking to see the license and the debt collector fails to respond with a copy of his license, you should mail a letter to him denying him his right to collect the debt. Place a limit on the number of days in the letter and tell him to cease contact with the credit bureaus about this debt. Also, place language in the letter if he continues you will turn him over to your state’s district attorney and consumer protection group if he does not cease contact. Keep a copy of this letter in your records to show the credit bureaus or courts if the debt collector continues to pursue the issue.
We advise never to threaten to sue unless you actually plan on doing it. The same goes for threatening to turn debt collectors into agencies if you do not plan to. We also advise sending all letters to debt collectors in your state with certified mail. This shows you are keeping an accurate record of communication with this entity. One step further could also be a log of debt collector interaction. You want to keep track of how they interact with you in case they are violating the law and you do need to take them to court.
Other template letters can be found at the Consumer Finance Protection Bureau for other similar debt collector issues. Utah Courts also have some advice on how to handle debt collectors. If you don’t understand these letters, or ever feel overwhelmed by debt collectors contacting you or confused about how this affects your credit report, don’t hesitate to contact us at Wasatch Smart Finance. We will come up with a plan to handle them, along with a plan for repairing your credit.
If you have signed up for our free template letter to stop out of state debt collectors please click the link below. Our custom template letter for out of state debt collectors can be located here. We encourage you to read the below article to place this template letter to good use.
I am a term life, infinity banking concept, indexed universal life insurance, and annuities advisor. I am looking to give Utahans a choice in life insurance as an independent advisor. I represent over 25 different insurance carriers on your behalf so we can find which one will approve you for the best policy. I started this company (Wasatch Smart Finance) so people like you could finally get honest answers & advice from advisors who have a comprehensive knowledge of finance and estate issues. Also as a Veteran, I want to assist other Veterans in their financial journeys.