Having an account in collections is stressful to say the least. Knowing that you're behind in your repayments is a terrible feeling. If you have outstanding bills in collection, here are the steps youíll need to take to tackle those accounts, pay them in full and get the collectors off your back.

Verify You Owe the Debt

Just because a collector contacts you and states that you owe money doesnít mean you do. Per the Fair Debt Collection Practices Act (FDCPA) you have the legal right to ask collectors to prove that you owe an outstanding debt before you begin repayment.

If you donít remember borrowing the money, you'll obviously want to verify that the debt belongs to you before you start sending the collector money.

Contact the Collector

Once you receive a collections notice, you can write a letter to the collection agency (certified mail - return receipt requested) asking for information about the debt. Itís your legal right to request and receive any, or all of the following:

  • Your complete payment history (how much you paid and when).

  • A copy of the debt agreement with your signature (Proof that you were in fact the person who purchased the item or signed the loan. If your signature was forged or you never signed a contract, youíll likely want to call an attorney to determine what your rights are).

  • The total debt due and the interest rate (Collectors may claim you owe more money than you actually owe and/or they may have increased your interest rate).

  • Additional charges and fees that were added to the account (some companies add exorbitant fees and charges to your account. Check to make sure that these charges are legal).



  • Proof that that collection company is licensed and registered to collect in your state (If they arenít, they cannot collect from you).

  • Proof that the creditor has given permission for the collector to collect the debt (Imagine that you paid off the debt in full to the collector who contacted you, but they donít legally have permission to collect the debt. Youíre then still legally obligated to pay back the original creditor you borrowed from).

  • Proof that the statute of limitations has not expired (If it did, you may not be legally obligated to pay back the debt).

Pay the Bill
Once youíve determined that you do owe the debt and are legally responsible to pay off the account, youíll want to contact the collections agency to see what your repayment options are. Since the account is already delinquent, weíll assume that you donít have the money to pay off the account in full immediately. If you do, pay it (money order only-NEVER give a collector access to your checking or savings account)!

Negotiating With Creditors
If you donít have the money to pay the account off in full youíll need to negotiate a payment plan with the collector. Beware that this process is not easy and will likely take time and patience. The collector will probably initially refuse to negotiate a settlement. He/she may try to pressure you into paying more than you can afford and will probably threaten to take you to court.

Donít let threats of lawsuits scare you into negotiating a plan repayment plan that puts you in a worse financial situation. You still need to pay your rent and keep food on the table. Remember that thereís no debtors' prison in the US and you wonít go to jail for having debts in collections. It may be frustrating to deal with the collectors and demoralizing to have debt, but with patience and perseverance you can tackle your debt and get your accounts out of collections.