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Love and Debt: Why you need to talk about money

How to Stop Living Paycheck to Paycheck

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What You Should Know About Debt Settlement

Create a plan to deal with medical debt

Options for Higher Education

Will Changes in Credit Reporting Affect You?

What to do if your medical bills are turned over to collections

What to do if your spouse can't pay his or her bills

What to do when a family member ruins your credit

Homeownership is possible

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How to get ahead of late fees

Is There a Service That Helps You Not Pay Bills

Is a Debt Owed

Patience is the key to furnishing a new home

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Will my boyfriend's bad credit affect me?

What to do if your account is turned over to collections

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Finding Money to Reduce Your Debt and Improve Your Credit

Simple Keys to Personal Finance

Be vigilant to avoid telephone and internet scams

Debt Settlement

Understanding credit utilization

The pros and cons of skipping a payment

Keep an open line of communication with parents about their finances.

Make a Choice to Get Ahead Financially

What to do when a relative asks you for money

Should You Buy a Home Now or Wait?

The difference between debt settlement and debt management

The negative impact of paying a payment 30 days late

Stressed by Finances

How to navigate two significant financial decisions: starting a family and buying a home

How to advise someone close to you who is coming into a significant amount of money

Make a Conscious Decision on How to Spend Your Money

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Americans spend more money eating out than on groceries

Having Good Credit Saves You Money

Developing good money habits with your first job

How to save for a home

How to Know if you are Ready for Home Ownership

When is the right time to buy a home?

You can improve your credit to buy a home

Plan a Memorable Vacation Without Incurring Debt

The Hidden Costs of Payday Loans

Be Wary of Credit Repair Services

Use Caution when playing the credit card game

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How your credit is affected by various debt options

Be wary of predatory small business loans

What to do if you fall behind on mortgage payments

Financing a College Education

Money, Credit and Relationships

Should you be concerned with your date's credit scores?

Best options for a small, short-term loan

How to help a relative who is always borrowing money from you

Skipping a Payment over the Holidays

What to do if you are overwhelmed by medical bills

Make your financial intention a financial goal you can achieve

What to do when a collector calls you

The difference between paying bills and managing your money

My wife and I have gone through some tough financial times, which eventually led us to file for bankruptcy.  Following this experience, I don’t ever want to use credit again, but my wife

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What to do when a collector calls you

Q. My son recently received a call from a company who was trying to collect on a large debt that they claim he owed from a long time ago. The collector insisted that he had to pay the bill immediately, and he's not even sure if he owes the debt. Plus, he and his wife want to buy a home, and he's worried that this situation will become a roadblock. What advice can I give my son?

A. Your son needs to take action to clear this matter up, since it won’t go away on its own. Collectors are tenacious and will pursue him relentlessly, especially on a large bill. Nevertheless, he shouldn’t assume that the debt is his, nor should he make payment arrangements until he is able to sort out the situation.

The first step he needs to take is to find out if the debt is his. He can do this by requesting a detailed statement of the owed debt, with an in-person phone call and a follow-up letter. (He should keep a copy of the letter, in case it becomes necessary for him to verify that he has requested the statement.) 

If it turns out that the bill is not his, he should not pay it.  He then needs to notify the collection agency that he does not owe the debt and direct them to cease contact.  Again, I’d recommend that your son follow up his verbal request with a letter, saving one for his files.  

If it turns out that the bill belongs to him, he needs to know if it is a time-barred debt.  In other words, he needs to know if the debt still legally collectible. Different states have different laws on how long a debt is legally collectable; this timeframe can vary from 3 to 6 years.  In addition, not all debts have a statute of limitations, including student loans, fines, and past due child support. You can search the Internet with the words “statutes of limitations in all 50 states” or contact an attorney for legal advice.

If the debt is beyond the statute of limitations for the state, then your son should notify the collection agency of that. The debt is no longer legally collectible.  If you son feels he needs to repay this debt, then he should do so only when he is able to pay it in full.  Making payments on a time barred debt is not a good move.  Agreeing to make payments or making payments can revive, waive or extend the statute of limitation. If the debt is legally collectible, he will want to pay it or make payment arrangements with the collection agency.

Unfortunately, it’s not all that uncommon for companies to try and collect debts that are outside the limits of the law. Recently, the Consumer Financial Protection Bureau (CFPB) took action against two debt buyers, Encore Capital Group and Portfolio recovery Associates, ordering them to refund $42 million and $19 million to customers and to pay an additional $10 million and $8 million in fines.  The companies are charged with buying debts without checking to see if the debts were accurate or enforceable and using unlawful tactics to pressure consumers to pay the debts. 

If you are ever contacted by a collection agency, always request a detailed statement of the bill. The Fair Debt Collection Practices Act governs what collection agencies can and cannot do in regards to the collection of a debt.  Your son can find out more information about the FDCPA at

Bonnie Spain is the executive director of the American Center for Credit Education and Consumer Credit Counseling Service of the Black Hills. For more information, email

The material in this transmission is provided for personal, non-commercial, educational, and informational purposes only. ACCE makes no representations or warranties with respect to the accuracy or completeness of the contents of this transmission and assumes no responsibility for errors, inaccuracies, omissions, or any inconsistency herein. You should consult a professional where appropriate.