Tick-tock debt: Law gives 30 days to respond to collector

Sending letter asserts rights to verify, dispute debt

Question for the CreditCards.com expert

Dear Let's Talk Credit,
I have gone through some financial difficulty over the past year and a half and I am behind on some of my credit payments. I received a letter today from one of my credit cards stating that my account has gone into collections, that the collection agency will now be handling my account and that I should call to make arrangements. It also states that I should write a letter within 30 days. I do not know what I should and should not do. I can't afford to pay the entire balance, which is $6,093. Any advice and suggestions will be greatly appreciated. Thank you. -- Patty

Answer for the CreditCards.com expert

Dear Patty,
I am sorry to hear about your financial difficulties. You are wise to determine how to proceed now that your account is in collections. Many people in your shoes choose to ignore the problem and by doing so make it worse.

First, the 30-day letter writing notice is likely applicable if you dispute any part of the debt. For example, if you do not agree with the total amount owed, or if it is not your account, you would need to write to the collection agency within 30 days to verify a debt's validity, and to dispute it if there are errors. The 30-day notice is an important right granted under the Fair Debt Collection Practices Act. If you don't dispute it, the debt will be considered valid. The Consumer Financial Protection Bureau has issued debt collection sample letters to help you craft a response.

How you decide to proceed will depend on whether your current financial situation has improved enough to make payments on the debt. The first step is to determine how much you can realistically afford to pay monthly. Once you know what you can actually afford to pay, then you are ready to contact the collector to negotiate repayment.

Should you need help making room in your budget to pay this account, you might consider contacting a nonprofit credit counseling member of the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling. A certified credit counselor can make recommendations on how to trim your expenses and may be able to negotiate better options with the collector on your behalf.

If you decide to communicate with the collector to work out payment, be sure that you stick with the amount you have determined you can afford to pay. Sometimes the collector will press for a higher payment, but agreeing to a payment that you cannot sustain throughout the agreed upon period will not solve your problem.

The important thing to remember is that you have a large debt that is owed and the sooner you work out the best plan to pay it, the faster you can move on to a brighter financial future.

Let's keep talking!

See related: 11 tips for dealing with debt collectors, FTC: Debt collectors go hunting with skimpy info

Meet CreditCards.com's reader Q&A experts

Does a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.

Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.

Updated: 01-23-2018