Perhaps you've been able to get a handle on your credit card and other debt through credit counseling , debt consolidation, or even bankruptcy. You've got a good budget you're working with, you're not getting any further into debt, and your even managing to put some money away. Life is finally settling down after your debt mess, and then one day you open the mailbox and find a letter from a collection agency. Maybe they are collecting on a debt you didn't know about, or perhaps it's a debt you thought you had settled. What should you do?
• Write a letter to the collection agency asking for proof of the debt in writing.
• If they respond with proof of the debt and you've settled the debt through an agreement, paying it off, through bankruptcy, or another way, be prepared to send copies of the supporting documentation.
• If they can't prove the debt and you're sure you don't owe the money, you aren't obligated to pay, but they'll probably still call and harass you. If the harassment is in breach of the Fair Debt Collection Practices Act, you can launch a complaint against the FTC. You may need to pay a lawyer for an hour or two of his or her time to get the matter straightened out.
• If they prove the debt and you haven't paid, you are liable for the debt.
• Call the original creditor and offer to pay them directly.
• Offer to settle the matter for 30% of what you owe. If you can't afford a lump sum, you'll need to arrange payments.
• If the collection agency agrees to settle for less than the amount or accept payments, get the terms of the agreement in writing.
• Keep detailed records of every instance of written or phone contact with the collection agency.