What should owners do after receiving a collection demand letter?

The appropriate course of action upon receiving a collection demand letter depends on the situation. If the debt is undisputedly due and owing, the best approach is sometimes to simply write a check for the amount due, thereby avoiding additional costs and collection action. Alternatively, if the funds are not available, it can be helpful to contact the debt collector and try to set up a payment plan.

What if a homeowner is unsure whether a debt is validly owed?

If a consumer is unsure whether a debt is validly owed, the Fair Debt Collection Practices Act (FDCPA) gives consumers the right to request “validation” of the debt within 30 days of the first written communication.  15 USC. §1692g.  If homeowners do not recognize the claimed debt, it is usually a good idea to inform the debt collector that the debt is disputed and of any relevant circumstances—such as identity theft.

If a collector receives a request for verification within the 30-day window, the collector must provide written verification of the debt before it commences further collection action. A request for verification must be made in writing and homeowners can obtain a sample letter requesting more information about the debt by visiting the Consumer Financial Protection Bureau (CFPB).  15 USC. §1692g.

If the matter cannot be resolved, or if the debt collector intends to take legal action, homeowners should consult with an attorney if at all possible.

How can owners dispute a debt?

Under the FDCPA, consumers (including homeowners subject to collection action for allegedly unpaid assessments) have a right to dispute the debt in writing within 30 days of the debt collector’s initial communication. 

If a written dispute is received, the collector must cease further collection attempts until it has provided written verification of the debt (or a copy of the judgment, as the case may be). Failure to provide a written notice of dispute within the 30 days does not amount to an admission that the debt is valid.  15 USC. §1692g(b).  As indicated above, homeowners can obtain a sample dispute letter from the CFPB.

Homeowners should keep copies of any written communications (including notice of dispute). If a creditor or debt collector files suit on a debt that is disputed, the consumer has a right to contest the debt in court and have the matter decided by an impartial judge or jury.

How can owners stop calls from debt collectors?

Under the FDCPA’s “cease and desist” provision, a consumer has the right to request that further communications from a debt collector be discontinued.  15 USC. §1692c(c). If a written cease-and-desist request is provided, the collector cannot communicate with the consumer about that debt other than for specific, narrow purposes. Id.  

A debt collector who continues calling a consumer after receiving a request to cease and desist violates the FDCPA.

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