We are getting debt collection calls from a cabinet contractor who didn't finish the job(we have emails of all punchlist items they have ignored). We have paid 95% of the bill and haven't been contacted to finish up the remaining items, honestly I just figured they'd drop it because it's probably at this point more money for them to come back and fix the issues that are remaining - and we don't have time to deal with it. Should I just ignore the debt collector? Is it best to answer and explain the unresolved work? Or what would the best approach be in that situation?
Don’t ignore the debt collects
In most jurisdictions, your failure to pay can and will be recorded on your credit history. This may affect your ability to obtain finance or the rate you pay for it. For credit reporting, there is no need for the creditor to prove the debt before doing this. For example.
In general, you are not legally allowed to default on a contractual obligation (i.e. not pay the bill) even if the other party has defaulted on theirs (i.e. failed to complete the work).
It is not clear that you have explained to the contractor that you are withholding the remaining payment until they have fixed the alleged defects or if you have just not paid the money. When you have a contract dispute you need to be clear and take active steps to resolve it.
Perhaps head office thinks all these items have been resolved. Perhaps you think they are defects or omissions but they are actually within normal tolerances or are exactly what you contracted for. Unless you talk to them, you can’t resolve it.
When you have set out the disputed items, given them a time to fix them, told them you will pay when they are fixed, and possibly set out an alternative method of resolution (like you accepting the defects for a 5% discount) then you have a bona fide dispute. At that point you can tell the debt collector this and they must stop pressing you and remove your name from the credit reports.
There is a contract between you and the contractor: you must pay an amount of money, he is supposed to do some work. You admit that you have breached your obligation, and allege that he has breached his obligation. One remedy that either party has is to take the matter to court, however the courts are unlikely to order a contractor to actually perform on the contract, instead they may award you monetary damages, essentially wiping the slate clean.
However, if they have turned the matter over to a collection agency, then the agency isn't interested in talking, they are only interested in getting the money that you owe. If you are in the US, the debt collector is subject to the Fair Debt Collection Practices Act. Be very careful about demanding that they leave you alone, in that case, because their only recourse will be to take you to court and force you to pay what you owe (once you demand that they leave you alone, they cannot continue to negotiate).
In the US, in all states, the contractor can file a mechanics lien against your property, which means that the property cannot be sold without first paying the debt.
Since the contractor apparently wants his money, this is not a matter that can safely be ignored.