If you fall behind on a bill, you may start getting collection letters. These letters remind you about the debt and ask for payment. They can come by mail, email, or text.

It is important to read these letters carefully so you understand your options.

When you may receive a collection letter 

You may get a collection letter if you have not paid a bill on time. The letter shows the debt amount, who wants the payment, and sometimes extra fees like interest or late charges. Companies must try to contact you before taking more serious actions, like suing you in court.

Information in collection letters 

Name of the creditor

The letter should contain the name and contact information of the creditor who claims you owe them money.  Check to make sure that you recognize the creditor.  

If you don't recognize the creditor, 

• It could be a scam
• The original creditor may have transferred your debt to debt collection agency or debt buyer.  Special rules apply to these debt collectors. 

👉 Learn more about validation notices from debt collectors.  

Amount of the debt

The letter will tell you how much you owe. It may include extra charges like interest or late fees. Check the amount to make sure it looks correct.

Payment options

The letter may give you a deadline for making a payment.  It may also list different ways to pay, like paying online or setting up a payment plan.  

If you know you owe the debt but can't afford a large payment, you can call the debt collector to see if a payment plan works for your budget. 

Be careful making payments on old debts. Debt collectors have time limits to sue you for debt. If you make any payment, even a small one, this will reset the time the debt collector has to sue you.  

👉 Learn more about these time limits. 

What happens if you do not pay

The letter may say what the creditor can do if you do not pay by the deadline. This could include:

• Sending the debt to a collection agency,
• Taking legal action to collect the money, or
• Turning off services like electricity, water, or phone.

What you can do

Try to deal with the debt as soon as possible. If you wait too long, the creditor may add more fees or take more serious steps.

Here are some steps you can take:

• Call the creditor to ask questions if you don't understand something.  
• Explain your situation if you are having trouble.  Creditors may be more willing to work with you.
• Offer a lump sum if you have savings. You may be able to settle the debt for less than the full amount.
• Ask about payment plans that fit your budget.