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What to do when debt collectors call

Some Illinois consumers are likely among the one-third of all adults in the United States whose debt went to collections in 2016. In 2017, 30 million people in the U.S. interacted with a debt collector. According to the Consumer Federal Protection Bureau, most people who get into debt do so because of such unexpected hardships as divorce or job loss.

People should be aware that they have certain rights in dealing with debt collectors. For example, the Fair Debt Collection Practices Act restricts how often a debt collector can call a person and when. People should also make sure the debt collection company is legitimate. They should get the name of the company and look online to see if there have been complaints about it. They can also ask for verification of the debt. They should get a copy of the original creditor’s contract and ask the debt collector to send copies of it as well. If the company cannot provide them, they must stop contact.

People should keep any records related to their contact with the company and should not give the company their bank account information. It may be possible to negotiate a settlement. The debt collector may offer a significant discount.

However, before reaching a settlement agreement, debtors might want to talk to an attorney about their options. They should understand the tax implications of any debt that is forgiven as well as what assets might be exempt if they file for bankruptcy. For example, a person’s retirement account may be protected during bankruptcy, so filing might be a better solution than cleaning out a retirement account to pay off a debt. An attorney may be able to explain to people whether they are eligible to file for Chapter 7 or Chapter 13 bankruptcy.