Debt Collection FAQ's : More Topics & FAQs : Consumer Assistance Program : University of Vermont

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Debt Collection FAQ's

You know your basic rights; now find out more about your rights around debt collection with the following questions:

What other rights do I have?

If the collector is a debt collection agency collecting on behalf of the creditor or an attorney who collects debts on a regular basis, you have some additional rights. These include: You can stop a collection agency from contacting you by writing a letter to the agency telling them to stop. Once they receive your letter, they may not contact you again except to say there will be no further contact or to notify you if they or the creditor intend to take some specific action, such as filing a lawsuit against you. You should send the letter by certified mail, return receipt requested, so that you have evidence that you sent the letter and that it was received by the agency. (See sample “cease contact” letter.)  The collection agency must send you a written notice containing the amount of the debt, the name of the creditor, and what action to take if you believe you do not owe the money.  A collector may not contact you if, within 30 days after you are first contacted, you send the collection agency a letter stating you do not owe the money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

Can a creditor require me to increase my monthly payments?

Once you have defaulted on a loan or fallen behind on your credit card payments, the creditor usually has the right to collect the total amount of the debt at once. However, creditors will often settle for less than the total. We recommend that you send a written proposal to the creditor indicating the amount you can afford and a payment schedule. Make sure that it is an agreement you can honor!

Can a creditor sue me if I am making regular payments?

Yes. If you have defaulted or fallen behind on your payments, the creditor can sue you, even if you are currently sending in payments. It is important to be able to document that you have been making an effort to pay off the account. If you are taken to court, make sure that you can document your income and expenses so that you can accurately demonstrate to the court your ability to pay the bill.

Can a creditor refuse my partial payments?

A creditor or collection agency can refuse partial payments. Sometimes they will return checks to consumers if they determine the amount is too small. If this happens, we recommend that you put the amount into a savings account. In the event that you are sued, you will be able to show your good intentions towards paying the bill.

Where can I report a debt collector for violating my rights?

If a creditor, attorney or collection agency has engaged in any of the practices described above, the first thing you should do is send them a certified letter directing them to cease all communication. If they continue to contact you or otherwise violate your rights, you should contact us.

Where can I get help managing my debts?

Vermont requires debt adjustors, debt management, and debt consolidation companies to be licensed with the Vermont Department of Financial Regulation Division of Banking.  If you are considering having a company help you manage your debt, check the licensing status of the business first.  

Last modified April 06 2017 01:56 PM

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