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Within 30 days of receiving the written notice of debt, send a written dispute to the debt collection agency. You can use this sample dispute letter (PDF) as a model. Once you dispute the debt, the debt collector must stop all debt collection activities until it sends you verification of the debt.
If your account goes to collections, don't ignore the debt. Instead, deal with the creditor and look into negotiating the debt or disputing it if there's been an error.
When your debt goes to collections, you may get persistent calls and emails urging you to pay what you owe. Your credit score could take a big hit if your debt goes into collections. You may be at risk of wage garnishment and other negative consequences.
Beyond contacting you directly, they can take you to court and sue for what you owe them. If they win?or you don't show up in court?they may be able to take money from your bank account, garnish your wages or place a lien on your property. After a certain period, debt collectors lose the right to sue you in court.
Approach negotiations professionally, assertively and with a clear understanding of your rights. Your goal is to reach an agreement that is manageable for you and aligns with your financial situation. Communicate in writing with the debt collector, request a payment plan and document everything for your record-keeping.
Open accounts/written contracts: The Hawaii statute of limitations on open accounts and written contracts is six years. Credit card accounts, loans that do not fall within the ambit of the Uniform Commercial Code, and debts arising under other written agreements all fall under the same six year statute of limitations.
Unfortunately, a debt in collections is one of the most serious negative items that can appear on credit reports because it means the original creditor has written off the debt completely. So when a debt is sent to collections, it can have a severe impact on your credit scores.
Beyond contacting you directly, they can take you to court and sue for what you owe them. If they win?or you don't show up in court?they may be able to take money from your bank account, garnish your wages or place a lien on your property. After a certain period, debt collectors lose the right to sue you in court.