Sandwiched between the ongoing drip, drip, drip of depressive economic data and the euphoria of a culturally transformative presidential election come the realities of bill collecting when many find themselves unable to pay their debts.
The Associated Press reports a growing epidemic of debt collectors ignoring the Fair Debt Collection Practices Act. Last year, 71,000 people filed harassment and abuse complaints with the Federal Trade Commission (FTC). In addition, 14,000 complained to the Better Business Bureau. The complaint rate has doubled since 2003. It is likely that 2008 numbers will reflect another significant jump due to the deteriorating economy and the inability of more individuals to pay their bills.
However, you hold the power to stop debt collectors from bothering you. There is no reason for you to endure the terror they are now inflicting on millions of Americans. In July, I wrote a two-column series on dealing with debt collectors. It appears that collector behavior problems are growing exponentially now.
If you’ve experienced any of these occurrences, they are illegal:
- Phoning you before 8 AM or after 9 PM.
- Calling you at work if you have told the debt collector not to phone you there.
- Attempting to collect a bill that is not yours or more money than you owe.
- Telling you a debt more than 7 years old will harm you. Unpaid bills (other than legal judgments and bankruptcies) must all be removed from your credit history after 7 years.
While a debt will remain on your credit report for 7 years, each state sets a time limit – statute of limitation – during which debt collection can be pursued through any legal means including seeking a judgment against you in court. After that time period has passed, there is no legal recourse available to collect a bill. However, if you make a small partial payment, you restart the time period. That is why collectors threaten in an attempt to get you to send them a check for any tiny amount.
If a court judgment is issued against you, assets may be seized to satisfy the debt. Many people have been shocked to discover the meager funds in their bank account – intended to keep a roof over their head or feed their family – have been seized. If a judgment has been issued against you for a debt you cannot pay, any funds in a bank account will be at risk for seizure.
If you absolutely cannot pay the bills that collectors are calling about and you don’t qualify for credit counseling programs or cannot file for bankruptcy, you can either screen all your calls to avoid credit collectors or you can stop them from contacting you by sending each debt collector a cease and desist letter. This document must contain some specific information, which is outlined below. After you write the letter, you will need to send it via certified mail with a return receipt requested so you have a legal record that your letter was received.
Cease and Desist Letter
Put your name and address at the top of the letter.
Insert the mailing date.
Type in: Certified Number _________. Before you seal the mailing envelope, neatly copy the certified receipt number onto the letter. Keep the post office receipt.
Address the letter to the agent who contacted you plus the name of the collection agency.
Insert complete mailing address.
Next line should read: Letter Regarding Account ________ [Insert collection account number]
Body of letter:
To Whom It May Concern
Under the Fair Debt Collection Practices Act, your services have been cancelled.
Neither you nor your organization/company can contact me again. You must cease and desist all attempts to collect the debt above. If you fail to comply with the law, I will file a complaint with the Federal Trade Commission and with the attorney general of [enter name of your state here]. In addition, I will immediately engage counsel to explore all civil and criminal action that we can pursue against you.
It is my policy to not recognize or interact with debt collectors. If this is my debt, I will only settle it with the original creditor.
Please note: this letter also serves as legal notice that any further contact with me via phone will be recorded with the intention of using the recording as evidence against you and your firm during legal proceedings.
I will appreciate your immediate attention to this serious legal matter.
[Sign your name.]
Type your name.
This action should stop harassment by collection agencies. Because so many people have fallen into difficult financial circumstances, businesses are desperate to collect funds. If there is any way you can work with a reputable credit counseling agency to reduce and repay your debts, that may be the most peaceful path to debt elimination over time.