When it comes to rental debt collection, you can bet your bottom dollar it’s going to happen. Debt collection in the US is a behemoth. There are a whopping 7,000 collection agencies out there, strutting their stuff and boasting a mind-numbing market value of $18.8 billion. In addition to that, these agencies rake in a jaw-dropping $13.4 billion each year. But the good news is that you can successfully dispute a rental collection and win.
In 2017 CFPB survey found more 1-in-4 consumers contacted by debt collectors felt threatened.¹ That number has been climbing steadily for the past decade. Now, if you’ve ever found yourself down in the arrears, these figures won’t come as a shocker. We all know that debt collectors can be pesky and just won’t leave you alone.
The CFPB recently made some rule changes that lay down the law for debt collectors trying to reach you. It includes guidelines for contacting you through email, text messages, and get this—social media. That friend request on Facebook, Twitter, or Instagram might just be some debt collector. However, the debt collector can’t legally go around telling others how much you owe and who you owe it to.
When faced with all this pressure, don’t go hiding from the debt collector. Those credit-tracing agencies aren’t exactly the epitome of perfection. It turns out, some complaints filed with the CFPB are from consumers who claim they were being harassed for debts they didn’t even owe. If you’re sick and tired of those annoying collection calls ringing your phone, we’ve got a nugget of wisdom for you. Usually, you want to answer the phone when it rings and lay down the law. Tell the agent, loud and clear, to stop calling you! Make sure to get their name and address first. Then write a letter telling them in no uncertain terms that they better not dare to dial your digits again. Notify them with a certified mail with a return receipt requested.
How to dispute a rental collection
Your previous landlord has done their part and sent collectors after you without notice. It is left for you to dispute the rental collection with the following tips:
1. Prepare any available documents
Get your hands on every piece of information and evidence related to the rental debt. That means digging up those letters and documents you received from the landlord. And if you have proof that the debt is not yours, make sure to bring that to the table too. Don’t forget about any witnesses who can vouch for you, so gather their testimonies as well to build a rock-solid case.
2. Keep shut about the rental debt
First things first, don’t go blabbering about the debt to anyone who rings, texts, emails, or contacts you. Trust me, saying the wrong thing can seriously backfire on you.
Next up, get your hands on the collector’s name, address, and phone number. Stay sharp, stay vigilant, and make those debt collectors play by your rules.
During the first phone call or within 5 days, those collectors better speak about the alleged debt. You’re legally entitled to know the details, like the amount owed, who currently owns the debt, and how to get in touch with the original creditor, the landlord, or the property manager. So if they don’t produce that information within 5 days, take note and keep them accountable.
3. Request a copy of your credit report
Waste no time and immediately request a copy of your credit report from the big three reporting agencies: Experian, Equifax, and TransUnion. Thanks to the Fair Credit Reporting Act (FCRA), these credit agencies are bound by law to provide you with the lowdown on your file and credit score.
4. Inspect your credit report
Comb through each report with a fine-tooth comb. Look out for any sneaky errors lurking in there to help you dispute a rental collection. These include incorrect info, outdated stuff, or anything that just doesn’t add up.
5. Obtain a credit bureau dispute form
This form is your weapon of choice to challenge any errors. Fill it out, making sure to include all the necessary information.
6. Print out your credit report
It’s time to shine a spotlight on those errors. Highlight those errors like you’re marking your way to victory.
7. Submit your dispute to the credit agency
Once you have the dispute form and highlighted report, it’s time to take action. Submit your dispute to the credit agency. You can do it online by uploading your forms or go old-school and send it via certified mail and don’t forget that return receipt.
Rental debt dispute letter
According to federal regulations, once you get a written notice about a debt, you have a 30-day window to write back with a debt dispute letter. The Consumer Finance Protection Bureau Debt Collection Rule requires debt collectors to provide you with a form that you can use to dispute the debt instead of going through writing a letter. That’s how you demand that the collection agency show evidence that you really owe that cash.
The form is just a validation notice that debt collectors send your way. It comes with the following:
- Name and mail address of the debt collector.
- Original creditor’s name.
- Current amount of the debt as of the day that the validation notice is sent.
- If there’s an account number tied to the debt, you can expect to see that on the notice too.
- Details of the debt, including the current amount, interest fees, payments, and credits.
- Information about your rights.
If you fail to dispute rental debt collection within a month, the debt collector gets the go-ahead. But what if you decide to write a mail instead of using their form? Your dispute letter should include your personal details, the actual rental amount that you supposedly owe, the name of the creditor, and a request to either hold off on reporting the debt to credit bureaus until you sort things out, or even better, get it removed from your report if it’s already made an appearance.
Don’t forget to send a second dispute letter to those credit reporting agencies
Drop them the same information as before, so they’re totally clued in on the fact that you’re still battling it out with the debt collection. Sometimes, things don’t get resolved until that debt information gets onto your credit report, making your credit score take a hit. If that happens, send yet another dispute letter to the credit-reporting agency, disputing the accuracy of that information and requesting it be removed.
Should I pay debt collectors or the landlord?
There are three possible situations when it comes to disputing a rental collection, and it’s easy to get all tangled up and confused about who’s who and where your money’s going. Sometimes, the landlord has their own collection in-house. In that case, you’re still going to pay the landlord, plain and simple.
Things can get a bit trickier. Sometimes, the landlord decides to outsource the debt-chasing business to a collection agency. Don’t be afraid to ask the debt collector if they actually own the debt. If they don’t, well, well, well, you might still have be able to negotiate with the landlord.
Once that debt changes hands in the lap of the collection agency, they become the new rulers of your financial fate. Any payments you make go into their pockets. Now, you can negotiate and try to sweet-talk your way into a better deal – the amount you owe might just be up for negotiation, like haggling with a street vendor.
Know your rights under FDCPA
In 1977, the Congress was like, “Enough is enough!” and passed the FDCPA (Fair Debt Collection Practices Act) to shield you from abusive collection practices. Credit bureaus have a responsibility under the FDCPA and can delete any debt information within 30 days if it can’t be confirmed. If they fail to comply, you have the right to take legal action. You can sue the credit bureaus and file a complaint with the Consumer Financial Protection Bureau.
Here are some key guidelines that’ll help you navigate debt collection:
- Collection agencies need to respect your precious sleep time and keep phone calls strictly between 8 a.m. and 9 p.m. local time.
- If you let them know that you’re not allowed to receive calls at work, debt collectors can’t call.
- You can send a certified letter to a collection agency, demanding that they stop calling.
- The FDCPA also gives you the right to receive a written validation notice from debt collectors that includes the amount you owe, the name of the creditor, and instructions on how to dispute the rental collection.
- Debt collectors are prohibited from making threats of violence, using foul language, pretending to be lawyers or government representatives, lying about the amount you owe, or scaring you with the threat of arrest.
- Debt collection agencies can only discuss your debt with you and your attorney. They might reach out to your friends and family to track you down, but when it comes to your debt, they can’t say anything.
And you know who gets hit the hardest? The senior citizens. That’s why most of these regulations are put in place to protect the elderly.
Statute of limitations on debt collectors
Step one is to verify that the debt actually exists. On top of the validation notice a debt collector is required to send, there’s a time limit on most debts called the statute of limitations. This limit varies depending on the state you’re in, ranging from a 3 years to 15 years. Most states fall somewhere in 4-6 years.
If the statute of limitations on your debt has already passed, a collection can’t take you to court and get a judgment against you. However, that doesn’t mean they won’t still try to collect. They can give it a shot, but if you refuse to pay, they’re pretty much out of luck legally. Keep in mind, though, that the unpaid debt will stick around on your credit report for 7 years from the last time you made a payment.²
What not to do when in rental debt
- Don’t disappear on debt collectors whether the debt is legit or not. Ignore those calls and letters at your own peril. Instead, follow the recommended steps to dispute a rental collection.
- Avoid the phone trap and stick to written communication. But sometimes you can have a chat. If that’s the case, bring on your recording skills. Different states have different rules on recording phone conversations though, so, play it safe and let them know you’re recording.
- Don’t even think about hiding your money or assets. Hiding your money in a friend or family member’s account is called fraudulent conveyance.³
- Don’t just take their word for it. If you need more time or you want to make sure that debt is legit, ask for a debt validation. It’s your right, and it can buy you some extra time. Take your time, double-check everything, and make sure that rental debt is valid.
Every time your debt gets sold, if the new buyer fails to collect, they might just send that information to a reporting agency. That means you could find the same debt listed under multiple company names across all three reporting agencies. The solution is to keep a watchful eye on your credit report from each agency. And if you spot any errors, don’t waste a second sending a dispute letter to the reporting agency.
You can actually get sued by a rental debt collector. If you fail to show up for your court date, you lose by default. Now, if the debt collectors manage to snag a court judgment, they’ll be coming for your wallet. The rules can vary depending on the state where the judgment was entered. So, if you’re looking to appeal the case, get yourself a consumer advocate attorney. The standard of proof in most cases is as low as it gets. So, whether you actually owe the debt or not, the relentless debt collectors will do everything get a judgment against you if you don’t show up. If you end up losing that court, your wages can be garnished by the creditor.
How to remove rental collections from credit report
1. Dispute the rental collection
If you either don’t owe the debt in question or if the collection agency fails to verify it within a sneaky 30-day window, you can dispute it. The debt can linger on your credit report even past the 7-year mark. You can fight back by crafting a well-worded letter to the collection agency, providing solid evidence of when that delinquency actually started.
2. Try to negotiate
Channel your inner smooth talker and reach out to that collection agency. Strike up a conversation and see if you can work out a deal. Offer to pay off the debt in exchange for them erasing that ugly collection from your credit report. It’s a win-win situation.
3. Be patient
Collections have an expiration date. They can only haunt your credit report for a maximum of 7 years from the time of your last payment. So if that magical moment is on the horizon, sit back, relax, and let time do its thing. Soon enough, that collection will bid you farewell and vanish from your credit report.
4. Pay off the rental debt
Even if you decide to pay off that rental debt to the collection agency, they can still remain on your credit report for 7 years. You can try your luck and negotiate with the collection agency. Offer them a little extra money in exchange for removing that collection from your credit report. Just make sure to get that agreement in writing.
5. Goodwill deletion
Suppose the debt you acquired was due to some seriously unfortunate circumstances, like a medical emergency or a situation completely out of your control. You’ve managed to pay off the debt, but that collection stays on your credit report. Reach out to the collection agency or the original creditor, explain your situation, and ask them to remove that collection out of sheer goodwill. If you’ve got good credit overall (minus the rental collection) and you’ve been reliable with your payments both before and after the delinquency there’s a chance they might just delete that collection from your credit report.
Can a rental debt collector contact you if you dispute debt?
You only have a measly 30 days from the moment you receive the required information from the debt collector to actually file your dispute in writing. If you miss that deadline, you risk losing some valuable rights. So, make sure you get your dispute in within that 30-day window, or you might find yourself in a tough spot.
Check credit reports regularly
Checking your credit report regularly so you can catch any issues early on and resolve them before they even have a chance to land in the hands of collection agencies. Don’t let those debt collectors catch you off guard.
If you find yourself on the losing end of a judgment, don’t panic just yet. Bring in a lawyer fast, like within 30 days. If your lawyer files a motion to reconsider during that window, there’s a chance you can get that judgment overturned.
A lot of the time, debt collectors are just working off some random data that shows the amount owed, without any real proof that you’re actually the one who owes the debt.
If you’re tired of that phone ringing off or your text alerts constantly pinging, you can reach out to a nonprofit credit counseling agency to help you with debt relief. Take action, get legal support, and don’t be afraid to ask for help when you need it to dispute a rental collection. Dealing with rental collectors can be a real pain and time-suck. So, do the needful to protect your credit.