Disputing a Debt
If a collection agency contacts you regarding a debt (or a portion of a debt) that you dont believe you owe, there are specific things you must do to document the dispute.
First, write the collection agency within 30 days of receiving the first notice, informing them that you dispute the debt and why. Make sure your letter is dated, properly addressed and shows the account number shown on the notice. It is also vital that you keep a copy of all correspondence for your records.
Upon receiving your letter, the collection agency must halt collection activity until a copy of a debt verification is sent to you. A verification may include a signed agreement, a copy of a judgment against you regarding the debt or an itemized statement of services rendered under your name (or the name of a dependent or spouse). It can also be as simple as a copy of the last bill the creditor sent you.
The collection agency cannot report the disputed debt to a credit bureau without also reporting that it is being disputed. However, if the collection agency reports the debt to a credit bureau before you dispute it, they are not obligated to update the credit bureau report.
If the debt cannot be verified by the creditor, the collection agency must cease collection activity on the account. If the collection agency continues to contact you regarding the debt, you should notify our office.
If verification is obtained from the creditor, the collection agency must mail a copy of the verification to you. It may then continue its efforts to collect the debt.
A legitimate debt should never be disputed merely to postpone repayment. In doing so you risk losing any leniency the creditor or collection agency may have granted you in paying back your debt.
I owe a company money. Cash is tight, but as long as I give them anything, even a dollar a month, they cant do anything to me, right?
Wrong. If you default on a debt the creditor or collection agency has the right to demand full payment on the balance of the debt. If you refuse or cannot afford to pay, legal action can be taken against you.