If you are dealing with debt, you are certainly not alone. According to data provided by CNBC, the average American holds more than $90,000 in debt. Should you start to fall behind on your payment, you may soon receive a collection letter from an attorney. You need to know how to effectively respond to a debt collection letter. In this article, our NJ collections attorney highlights the key steps you should take if you received a debt collection letter from a lawyer.
Four Steps to Take if You Received a Debt Collection Letter From a Lawyer
1. Carefully Review the Letter to Determine the Claim
As a starting point, you should carefully review the letter to determine the validity of the claim. When an attorney or collection agency sends a letter to a consumer or a business, they are stating that a specific amount is owed and likely past due. Of course, that does necessarily mean that their claim is valid. In general, debt collection letters fit into one of the following categories:
- Known and Valid Debts: You may open a collection letter to find exactly what you expected. You may already be aware of the debt and have a general understanding of the amount owed.
- Known Debt, Questionable Details: You may be aware of the debt, but you may disagree with the specific details. In some cases, the collector may claim that far more is owed than you think is valid. Alternatively, you may have already paid part or all of the amount owed.
- Unknown Debts: Finally, you could receive a collection letter regarding a debt you have never heard of before. Collection letters regarding previously unknown debts require immediate attention.
2. Consider Sending a Debt Validation Request
A debt validation letter is a type of legal notice sent by a debtor to a creditor/collector. In most cases, a debt validation letter is sent after a debtor receives a collection letter from an attorney or an agency. Under state and federal regulations, debt collectors are responsible for proving the validity of a debt. If you fail to dispute a debt within 30 days, collectors/attorneys will generally assume that it is valid.
Upon a timely request of a debt validation letter, a collection agency or attorney should send proof of the debt. You should strongly consider sending a validation letter after receiving an initial collection letter—especially if you believe that the debt is invalid. A New Jersey collection lawyer can help you prepare a validation letter.
3. Gather and Organize All Relevant Financial Documents and Records
Next, make sure that all of your relevant documents and records are organized. The more information you have, the easier it will be to find a solution. Gather everything you have regarding the debt in question. If you have already made payments to the creditor, a collection agency, or any other party, make sure that you have verification.
4. Be Proactive: Debt Does Not Go Away on its Own
Once a debt goes into collection, it is always best to take a proactive approach. Every month that goes by without action can make it more difficult to resolve the issue. In some circumstances, additional fees may even be added to the debt. Further, you could end up facing a lawsuit over the past due financial obligation. Ultimately, there are three basic paths to address past-due debt:
- Full Payment: You can always resolve a collection letter by agreeing to pay the amount that the attorney says you owe. If you do agree to pay, make sure you get written verification that all outstanding financial obligations are fully satisfied.
- Settlement: You can also enter into settlement negotiations. If you acknowledge that a debt is valid, but you are not in a position to pay the full amount, you may be able to get the debt settled for less. A New Jersey debt collection lawyer can represent you in settlement negotiations.
- Dispute: Finally, you always have the right to dispute a debt. If you feel that the debt is not legally valid or enforceable, you can challenge the collection efforts. An attorney can help you determine the right approach.
Contact Our New Jersey Collections Lawyers for Immediate Help
At Snellings Law LLC, our New Jersey debt collection lawyers are skilled, solutions-focused advocates for our clients. If you have any questions about the steps to take after receiving a collection letter, we can help. Contact our law firm today for a confidential, no-obligation consultation. From our office in Parsippany, we provide debt collection services in Morris County and throughout New Jersey.