Understanding debt collectors

If you are contacted by a company you don't know, they may be a debt collector. There are two main types of debt collectors: 

• Debt buyers are companies that buy debts from creditors. They usually buy the debt at a big discount and try to collect the full amount.
• Debt collection agencies are hired by creditors to try to collect the debt. They usually get a commission on the money they collect. 

Use calls to get information about the debt

Don't panic when a debt collector calls. This is your chance to find out more information about the debt. 

When they call, ask for:

• Their name,
• The name of the company they work for,
• That they are collecting debt,
• How much you owe, and
• The name of the original creditor.

If the caller refuses to provide this information, it may be a scam. 

👉 Learn more about how to protect yourself from scams

Be careful when talking to debt collectors

• Don't say you owe the debt. When a debt collector first calls, you may not have enough information to know if the debt is really yours. If you admit you owe it, that could restart the time they have to take you to court.
• Be careful making a payment, even a small one. Debt collectors may try to get you to make a small payment “just to show good faith.” But even a small payment can restart the time they have to take you to court.
• Don't share personal information. You don’t have to give them personal details like your Social Security number, bank account info, where you work or bank, or any passwords. Protect your information.

Look for a follow up letter

After a debt collector first contacts you, they must send you a written notice about the debt within 5 days.

You have 30 days after this notice to request more information. If you dispute the debt in writing, the debt collector must investigate your claims.

Check to make sure the debt collector is legitimate

Debt collectors must be licensed in Illinois. You can look up the company to make sure it is licensed.

You can also check your credit reports at AnnualCreditReport.com to see if a debt buyer is reporting the account. 

Ignoring calls will not make the debt go away

You are not required to take debt collector calls. But that will not stop them from calling or make the debt go away. A law called the Fair Debt Collection Practices Act limits the amount of times a debt collector can contact you: 

• They cannot call you before 8AM or after 9PM, and
• They cannot call you more than 7 times in a week.

You can limit or stop collection calls. You can tell debt collectors to stop calling you or limit the way they are contacting you. This won't make the debt go away, but it can give you some time to figure out how to deal with the debt.