What should I do when my debt is in collections?

The federal Fair Debt Collection Practices Act (FDCPA) gives you specific rights once a debt is in collections. Collectors cannot call before 8 AM or after 9 PM, cannot threaten actions they can't take, cannot use profane language, and must stop contacting you after a written request.

Within 30 days of first contact, you have the right to request written debt validation. Once you do, the collector must pause collection until they verify the debt with the original creditor. If they can't verify it, they must stop collection efforts.

Third-party collection agencies typically buy debt for 4-14 cents on the dollar. They'll often accept settlement at 20-40 cents on the dollar to clear the account. Always get the settlement agreement in writing before sending payment, and never agree to anything verbally that could be construed as acknowledging the debt.