If you owe money and you’re struggling to pay it back, there are actions you can take.
Making a list of your debts
Collect together all the information about your debts, such as contracts, bills and statements. Your debtsmight for example include:
Make a list of your debts and write down the details of each debt.These details might include:
who you owe the money to - this is your ‘creditor’
when you first missed a payment
how much you owe - this might be in a recent statement
your account or reference number - this might be at the top of your statement
what the creditor has done to get the money back - for example, sending you letters or taking you to court
Try not to worry when you see all your debts written down - the important thing is that you're sorting them out.
If you’re not sure if you have to pay a debt, check if the law says you have to.
Getting your credit reports
Credit reports show what money you’ve borrowed and paid back. It’s a good idea to get copies of your credit reports to check you’ve got the right details for all your debts.
You can get free copies of your credit reports from the 3 credit agencies - Experian, Equifax and TransUnion (formerly Callcredit). Ask for the 'statutory report'. It’s worth getting reports from all 3 agencies as they sometimes have different information.
Your credit reports might not have details of all your debts, so you should also look at the information your creditors have sent you. Credit reports don’t normally show changes in the last 4 to 6 weeks. They also won’t show if you have:
Your creditors have a limited time to take you to court to repay a debt. For most debts, the time limit is 6 years.The time limit restarts if you write to your creditor or make a payment.
If you haven’t got court papers after 6 years, your creditor usually can’t take you to court.
Don’t contact the creditor if:
Check if the time limit has passed or will pass soon. If you’re not sure, get help from your nearest Citizens Advice.
What to say to your creditors
You should usually try to contact your creditors - unless the time limit for them going to court has passed or will pass soon.
Tell them you’re trying to deal with your debts. Ask them to:
confirm all the details of your debts
stop chasing you for payments while you work out what you need to do
stop adding interest and charges so the debt doesn't get any bigger
It’s usually better to write or send an email, so you have a record of what they say. You can use our template letter to help you write to them.
Don’t write to your creditors if your debt is old and you think it might be statute barred or soon will be.
Next steps
Don’t worry if you don’t know how to deal with the debts on your list. If you make a plan and stick to it, any debt problem can be managed. The next step is to check which debts to deal with first.
If you’re feeling overwhelmed or need help dealing with your debts, contact your nearest Citizens Advice.
FAQs
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
What to say when collecting a debt? ›
My name is John, and I am a debt collector with XYZ Company. Your bill payment is past the due date. Based on our records, the total outstanding balance of $10,000 is overdue. We have tried contacting you seven times during the last two weeks.
Do debt validation letters really work? ›
Do Debt Validation Letters really work? Yes, they do. When a debt collector receives a Debt Validation Letter, they are legally required to provide validation of the debt. Debt Validation Letter's work best when they include a cease and desist clause that forces a lawsuit.
What happens when a collector does not answer a debt validation letter? ›
What Happens If the Collector Doesn't Verify the Debt? If a debt collector fails to verify the debt but continues to go after you for payment, you can sue that debt collector in federal or state court. You might be able to get $1,000 per lawsuit, plus actual damages, attorneys' fees, and court costs.
What is the 609 credit repair loophole? ›
Contrary to what some might think, section 609 does not require credit bureaus to provide proof of your accounts. The FCRA gives you the right to dispute information you believe to be unfair, inaccurate or unsubstantiated.
What is the loophole of debt collection? ›
The FDCPA contains a loophole for so-called in-house collections. An in-house collector is a branch of the bank, retailer or credit-card firm that originally made the loan or offered the credit line. Lenders often try to collect debts themselves in the early stages of a default, using their own collection agencies.
What's the worst a debt collector can do? ›
Debt collectors are limited on when they can call you — typically, between 8 a.m. and 9 p.m. They are not allowed to call you at work. They can't lie or harass you. Debt collectors can't make you pay more than you owe or threaten you with arrest, jail time, property liens or wage garnishment if you don't pay.
What not to say to a debt collector? ›
Debt collectors may ask questions to verify your identity, but you should never provide sensitive or financial information, at least not until you've verified the debt and that it's not a scam.
How do you outsmart debt collectors? ›
You can outsmart debt collectors by following these tips:
- Keep a record of all communication with debt collectors.
- Send a Debt Validation Letter and force them to verify your debt.
- Write a cease and desist letter.
- Explain the debt is not legitimate.
- Review your credit reports.
- Explain that you cannot afford to pay.
Debt collectors don't want you to know that you can make them stop calling, they can't do most of what they tell you, payment deadlines are phony, threats are inflated, and they can't find out how much you have in the bank. Furthermore, if you're out of state, they may have no legal recourse to collect.
You can sue the debt collector for violating the FDCPA. If you sue under the FDCPA and win, the debt collector must generally pay your attorney's fees and might also have to pay you damages. If you're having trouble with debt collection, you can submit a complaint with the CFPB.
Do debt collectors have to show proof of debt? ›
Once the collection company gets the letter, it must stop trying to collect the debt until it sends you written verification of the debt, like a copy of the original bill for the amount you owe. Consider sending your letter by certified mail and requesting a return receipt to show that the collector got it.
How long before a debt becomes uncollectible? ›
Old (Time-Barred) Debts
In California, there is generally a four-year limit for filing a lawsuit to collect a debt based on a written agreement.
What do creditors need to prove a debt? ›
It's generally easier for first-party creditors to prove you owe a debt. They simply produce the original credit agreement that shows your name and identifying information, like your address and Social Security number.
How long does a debt collector have to respond to an answer? ›
There's no set time limit in which collectors must respond to a debt verification request you send them. However, they're required to send a debt validation letter within five days of first contacting you.
How do you outsmart a debt collector? ›
You can outsmart debt collectors by following these tips:
- Keep a record of all communication with debt collectors.
- Send a Debt Validation Letter and force them to verify your debt.
- Write a cease and desist letter.
- Explain the debt is not legitimate.
- Review your credit reports.
- Explain that you cannot afford to pay.
Debt collectors may ask questions to verify your identity, but you should never provide sensitive or financial information, at least not until you've verified the debt and that it's not a scam.
What to say to creditors to stop them from calling? ›
If you ask a debt collector to stop all contact – regardless of the communications channel – the collector must stop. Keep in mind, though, that you could still owe the debt. If you don't want a debt collector to contact you again, write a letter to the debt collector saying so.
What is debt trap in one word? ›
A debt trap means the inability to repay credit amount. It is a situation where the debtor could not be able to repay the credit amount.
