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Tips for Dealing With Debt Collectors

Dawn Kuczwara
Dawn Kuczwara Contributing Writer
Updated Jul 21, 2020

You want to meet your obligations while also protecting your business.

If your business is going through tough times or if you forgot to pay a vendor or a bill, there is a chance you may hear from a debt collection service. 

Business debt collection is different from debt collection for a personal account. It’s important to know what you should and shouldn’t do, and what rights you have, to protect yourself during the process.

The risks of ignoring debt collectors

If you are being contacted by debt collectors, don’t ignore them. The last thing you want to do is make a debt-related problem worse by pretending it doesn’t exist. 

Here’s what can happen if you ignore a collections letter. 

  • You will hurt your credit. Ignoring debt collectors and not addressing the debt will negatively impact your credit score. Debt collectors report delinquent accounts to the credit bureaus, a move that will hurt your credit score for several months – if not years. This is in addition to credit damage that has likely already occurred due to late or missing payments. 
  • Your debt could grow. If you ignore debt collectors, you’ll have additional interest or collections costs tacked onto your existing debt. Responding to initial calls or letters, however, prevents that debt from growing. 
  • You may not owe a debt. At the very least, respond to debt collectors to determine if the debt is legitimate. If you don’t recognize the debt or the amount isn’t accurate, you can dispute it. But you’ll never know this information unless you speak with the debt collectors in the first place. 
  • You could be sued. Debt collectors can file a lawsuit against you for ignoring them, and ignoring the subsequent lawsuit can give the collections agency power over your money. The court may order wage garnishment, in which a portion of your paycheck is withheld to pay off your debt. The collections agency may also go after the funds in your bank account. 
  • It won’t prevent debt collectors from contacting you. Those who ignore collections agencies typically do so in an attempt to make them go away. However, debt collectors don’t make money unless you pay them, and they’re likely to keep trying to contact you. 

1. Don’t ignore the collections agency.

If you’re getting calls and letters from a collections agency, ignoring them won’t make them go away. It could make the problem worse. A collections agency can continue to call you and may report the unpaid debt on your business credit report. Those debts will appear on your credit report for up to seven years. 

If an agency is trying to reach you, talk to the representative. Ask them to mail you validation of the debt, which the law allows for within 30 days of being contacted by a collections agent. This should give you the date of the debt and the name of the creditor so that you can investigate the issue. 


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Dawn Kuczwara
Dawn Kuczwara Contributing Writer
Dawn Kuczwara is a former executive with more than 17 years of experience in technology. Now, as a professional writer, Dawn uses that experience to write about business, technology and leadership. When she isn’t wordsmithing, she spends her time doing improv comedy, reading, playing video games and hanging out with her family and two dogs, Pip and Zoe.