Federal laws dictate how a creditor may contact a debtor when attempting to recoup a debt. These regulations also inform a creditor of how to respond when served with a letter from a debtor. The type of response required depends on the intention of the letter. Failure to respond appropriately to the debtor's request could result in civil fines for the creditor or representing collection agency.
Right to Communicate
The Fair Debt Collection Practices Act makes it illegal to continue contacting a debtor to recoup payment of a debt once the debtor informs you in writing that he no longer wishes contact. If you or a collection agency representing your interests receives such a letter all communication with a debtor must stop. This means no phone calls, emails or letters. An exception to this rule occurs for official documents including information relevant to any lawsuit you file against the debtor to recoup payment.
Investigating a Debt
As a creditor, your debtor has the right under The Fair Credit Reporting Act, to make a written request to confirm any notation appearing on her credit report. A credit reporting bureau may contact you in regards to the debtor's request in an effort to confirm that you are conducting collection practices on the right person and that the debt itself is valid. This must usually occur within 30 days of receipt of the debtor's request. You should take an attempt to contest the validity of a debt seriously. Failure to do so could result in civil fines from the federal or state government.
Making Payment Arrangements
A debtor may contact you in writing to communicate his financial situation and attempt to make payment arrangements. The letter may contain what funds are available to the debtor or simply a request to contact to determine if an agreement on repayment is possible. As a creditor, you should attempt in good faith to contact the debtor over the phone to work with the debtor to find a solution for repayment that is both comfortable for the debtor and feasible to recoup your costs in the shortest time possible.
Keep All Communications
Always make a copy of any official communication you receive from a debtor. This allows you to build up a collection file on the debtor, which can prove useful if you must sue the debtor in civil court to recoup the debt. These communications also help prove the status of the statute of limitations on a debt, as any debtor communication with you restarts the statute and gives you more time to collect the debt.
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