Delinquent credit card debt may be charged off by your credit card company and your account may be closed. That means the company has written it off in its books as bad debt. At that point, an in-house collection agency or an outside one hired by the company usually takes charge of the debt and will try to get you to pay it. Knowing your rights and the process helps considerably.
Your Rights
The Fair Debt Collection Practices Act (FDCPA) is a federal law designed to protect consumers from predatory creditors and collection agencies. Under this law, collection agencies must send you a written statement of the debt they believe you owe within five working days of the first phone call. Also, they may only call you between the hours of 8 a.m. and 9 p.m. in your local area, unless you give them permission to do otherwise. Most importantly, they may not threaten or harass you in any way, including through use of obscene language. If you tell them that you cannot receive calls at your job, they must cease calling you there. If collection agents violate any part of the FDCPA, you may have grounds to sue. See the FDCPA for all specifications.
Negotiation
Collection agencies may be willing to negotiate payments for the amount you owe on a credit card. If a debt is old, offering a lump sum amount such as 35 percent of what the agency says you owe may be accepted just so the company can remove your account from its records. If the debt in question is yours, and collection agencies are not mistakenly contacting you, consider attempting negotiation. Stipulate that you'll offer a certain amount but only if you can get a written letter from the collection agency promising to remove the collection account from your credit history with all three credit reporting bureaus (Experian, Equifax, and TransUnion). The letter should also state that the debt will be marked as paid in full so it cannot be sold to another collection agency. Don't settle for an oral agreement over the phone; get it in writing before you give the promised money.
Stopping Agency Contact
If you do not want a collection agency to contact you any longer, send it a letter requesting that it cease all contact with you. Send it certified mail, with return receipt requested, and keep a copy for your files. After receiving such a letter, collection agencies can no longer call or write you, except to inform you that they have received your letter and will be ceasing contact, or are proceeding with a specific action, such as a lawsuit.
Lawsuits
Collection agencies can file a lawsuit against you to obtain debts they are owed. However, such lawsuits must fall within your state's statute of limitations regarding credit card debt, which is typically three to five years from the date of last contact. The statute of limitations varies by state, so you may want to contact a local attorney to learn the specific law in your state and how it applies to your situation. If you receive a summons to appear in court, whether the debt is yours or not, respond or have your attorney respond by the deadline to protect your rights. If the statute of limitations has passed, bring evidence to your court date to indicate this fact, in addition to stating it orally.
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