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Things That You Should Never Do When Dealing With Creditors


When I go to the courthouse, I often see consumers appearing in court pro se who make truly poor choices when speaking to the judge. I also see people who are facing a judgment based on prior oversights and decisions.

Here is my list of absolute "don'ts" when dealing with creditors:

1. Don't ignore your mail.

As I mentioned my previous post, many debt buyers try to use an "account stated" theory when suing to collect on debts that they've purchased. This theory operates on the assumption that your failure to respond to a statement of what is owed is confirmation of that statement. If you receive a letter from a company you have never heard of, and that letter claims that you have 30 days to dispute the debt, then dispute that debt in writing within 30 days.

2. Don't rely on oral communications

Most credit agreements state that the proper means for providing notice to the creditor is in writing. Having a call center is a service provided by the creditor, it is not the end-all, be-all of providing notice. Even if the creditor records calls, that does not mean a phone call is sufficient notice to the creditor. Always, always, always dispute debts, inquire as to the status of your account, and provide other important notices to a creditor in writing.

3. Don't "agree that you owe the money."

If you are even considering fighting a debt buyer or other creditor's lawsuit, then you cannot, under any circumstances, acknowledge that you owe a debt. Admitting that you owe money is by far one of the worst admissions that you can make.

If you make the admission on the phone to a debt collector, then you have just 1) consented to owing the amount that is claimed and 2) you just revived an uncollectable debt (one where the statute of limitations has expired).

If you make the admission to a judge, then you will have a judgment entered against you on that day. The judgment will begin to collect statutory interest (9% in Illinois), and the creditor will be able to file a judgment lien against your home, garnish your wages, garnish your bank account, and take other collection actions as permitted by state law.

This concludes my top three of things to never do.