Got a debt collection letter? What to do first
A debt collection letter can be stressful. The most important things are to check it is real, check the debt is yours, and not ignore it.
Rules about debt collection vary by country. This guide gives general steps. For advice about your situation, contact a free, non-profit debt advice service in your country.
Step 1: Check the letter is real
Fake debt collection is a common scam. Warning signs include threats of immediate arrest, demands for payment by gift card or wire transfer, refusing to give their company name or address, or pressure to pay before you can check anything. Look up the collection company yourself, not from the letter, and contact them using those details.
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Step 2: Check the debt is yours
Look for the name of the original company you owed, the account number, the amount, and the date. Compare these with your records. Debts are sometimes sold, so the collector may be a different company from the one you originally owed.
Step 3: Ask for details in writing
You can usually ask the collector to prove the debt: who the original creditor was, how much is owed and how that amount was calculated. Ask in writing and keep a copy. A simple message works:
Step 4: Don’t ignore it
Ignoring a real debt can lead to extra fees or court action. Even if you can’t pay right now, responding gives you more options, such as a payment plan.
Step 5: If you owe it, make a realistic plan
Only agree to payments you can actually keep up with, after essentials like rent, food and utilities. Get any agreement in writing before you pay.
What not to do
- Don’t give card or bank details over the phone until you’re sure the collector is real.
- Don’t admit to a debt you don’t recognize.
- Don’t agree to a payment you can’t afford just to end the call.
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