Stop Bill Collectors! » Debt Collection Law

Cease and Desist Letter: Vital Information Often Overlooked by Debtors

Janice — Tue, 02 Feb 2010 16:56:23 +0000

Thinking of writing a cease and desist letter to your creditors? (See this article for a sample cease and desist letter). It’s not as simple as writing a letter to your creditor telling them to stop calling you. Here are 5 vital facts you need to know before you send the cease and desist letter to stop creditors from hassling you.

Cease and Desist Letters Can’t be Sent to Original Creditors. Cease and desist letters only apply to third party collection agencies. That means if Sallie Mae is calling you about your student loan every week, Bank of America is calling you every day about your overdue mortgage, or Citibank is calling you ten times a day about your overdue account, there’s exactly nothing you can do about it. You’ll have to wait until the original creditor turns your account over to a collection agency (usually in about six months).
You must send the cease and desist letter by certified mail. Otherwise, the credit collections agency will keep calling you, and deny that they ever got your letter. They are trained to ignore non-certified cease and desist letters, so make sure you beat them at their own game.
Don’t give the agency an excuse to say they couldn’t match the letter with an account. Include the current date, your name, address, phone number(s) where the agency has been calling you, and your account number. If you don’t have your account number, make sure to include your full name and date of birth.
Never put your social security number on a cease and desist letter, even if you don’t know your account name. Chances are, the collection agency doesn’t have your social security, and you do not want them to have it. If the agency gets hold of your social security number, they can use it to locate all of your assets, including bank accounts, property, and cars.
Keep a copy of your letter. If you don’t, you have no record of what you sent the agency to show in court (should you decide to sue them at a later date for FDCPA violations). The agency could claim you send a check, or another item in that certified letter. That’s another good reason to date your letter!

The Simplest Way to Stop Creditors From Calling You

Janice — Mon, 01 Feb 2010 17:03:54 +0000

If you want to stop creditors from calling, you’re going to have to pick up the phone and talk to them. That may seem counterintuitive (why the heck would you want to talk to them?), but you–like them–are going to follow a script that’s guaranteed to have them stop calling you. Peace is just a few phone calls away.

Why You Have to Answer the Phone

If you are being harassed by collection agencies, you’re not going to know who they are unless you talk to them. That debt you once owed Citicard, or Bank of America, or Discover, has long since been sold to a collections agency. That’s right: sold. Don’t be fooled into thinking that when you are sending money to a credit collections company that you are paying off your original debt. You’re paying someone else, who purchased that debt (from someone else) for pennies. And you’ll have no idea who that company is (or where, exactly, that company is located) until you talk to them.

Five Easy Steps to Stop Creditors From Calling You

Step 1: Turn your ringer on and pick up the phone. Follow this script exactly (once you have verified it’s a collections call).
“I’d like to send you something in the mail. May I have your address?” Don’t let them enter you into a conversation. Don’t let them pin you down to an amount, a payment schedule, or anything else. If they don’t give you the information, ask to speak to a supervisor. The collections agent won’t want to refer a customer who is offering to “send something in the mail” to a supervisor.
Step 2: Write down the address. Say “You will have something within the week” and hang up.
Step 3: If the same agency calls back (they might), tell them you just sent them something. And hang up again.
Step 4: In the meantime, send them a cease and desist letter.
Step 5: Repeat the above steps (1 through 4) as many times as necessary. Sure, it will be the week from hell, but you’ll have a list of names of creditors to send those cease and desist letters to. That cease and desist notice serves as a legal way to stop creditors from calling you for the price of a postage stamp (and a couple of bucks extra at the post office).

Debt Collector Harrassment: Craig Cunningham’s Secret Weapon

Janice — Mon, 01 Feb 2010 14:40:58 +0000

If you are being harassed by debt collectors, take a leaf out of Craig Cunningham’s book. Cunningham owes $100,000 in debt, and he’s inundated with calls from debt collectors. But he doesn’t mind: he’s earned a whopping $20,000 by answering bill collector calls: every penny of it has come from the debt collectors themselves! Most people who receive calls from debt collectors dread picking up the phone, but not Cunningham. He’s beat debt collectors at their own game by catching debt collectors violating federal law, and suing them in court.

How to Start Making Money by Answering Bill Collector Calls

Cunningham’s first money making call ($1,000) came from Equinox Financial Management Solutions, a third-party debt collector. The collection agency threatened to garnish his wages if he didn’t pay, and put a lien on his house. Luckily, Craig knew that the Texas Debt Collection Act forbids debt collectors from making those types of threats. Cunningham sued the agency, and two months later was awarded $1,000.
Cunningham’s next suit was over auto-dialed and prerecorded calls to his cellular phone (a Telephone Consumer Protection Act violation worth up to $1,500 per event). He also filed complaints that agencies were not investigating inaccurate information in his credit report that he brought to their attention ($1,000 per violation) and filed 15 other, similar lawsuits against debt collectors.

The Simple Technique That You Can Use to Sue Debt Collectors

Know your rights: learn everything you can about the Fair Debt Collections Practices Act (FDCPA), the Telephone Consumer Protection Act (TCPA) and the Fair Credit Reporting Act (FCRA), and any debt collections acts that your state has enacted (like the Texas Debt Collection Act). These laws are highly technical and the schleps that work at the agencies aren’t usually that well trained (there’s a high turnaround in debt collection agencies because let’s face it, who wants to work at a job 9 hours a day where your only goal is to squeeze money out of people who can’t afford it?). Use that fact to your advantage and study the law.

Debt Collectors Will Settle With You

Know that agencies will settle, rather than fight you in court: That’s right, debt collection agencies will send you a check rather than fight the charge that they violated the act. Why? Because it’s cheaper to send you a $1,000 check (settling out of court) than it is to pay a lawyer $350 an hour to fight a charge they will probably lose anyway. Debt collection employees are not highly trained people, and they routinely make mistakes.

How to Sue Debt Collectors

Not sure how to file a lawsuit against a debt collector? It’s simple: read this article on How To Sue Debt Collectors The Easy Way (and Win).

Reference: The Dallas Observer:Better off Deadbeat

How to Protect ALL of your Assets from Creditors With Tenancy by the Entirety?

Janice — Tue, 19 Jan 2010 16:13:29 +0000

Tenancy by the entirety is a tool you can use to outwit debt collectors. It allows a husband and wife to own property together as a single legal entity. Why should you care about this legal tool? Because judgment creditors for either party cannot put a lien against your property. That means if you own a debt (and not your spouse), the creditor cannot touch a penny of any interest you have in a tenancy by the entirety item.

According to Attorney Jonathan B. Alper, any property (“including all real property, tangible personal property, and intangible personal property”) can be protected by this law.
If you live in one of the following states, you can claim tenancy by the entirety for property like your home, your car, and your checking account, fully protecting it from creditors:

Alaska
Arkansas
Delaware
District of Columbia
Florida
Hawaii
Maryland
Massachusetts
Mississippi
Missouri
New Jersey
Mississippi
Oklahoma
Pennsylvania
Rhode Island
Tennessee
Vermont
Virginia
Tennessee
Wyoming

States that allow tenancy by entirety for real estate only:

Illinois
Indiana
Kentucky
Michigan
New York
North Carolina
Oregon

rules

acquire the property at the same time
acquire the property through one title
have equal interest in the property
have equal rights of possession
be husband and wife
if real estate, you must occupy as your primary residence

If the spouse who owns the debt dies first, the judgment creditor can’t ever put a lien on your property. It isn’t true the other way around though, so if the debtor spouse is the surviving spouse, you’ll need to use other methods to outwit your creditors. Tenancy by the entirety is a complicated are of the law: if you are going to use it, get a decent lawyer to draft your deed. There are many situations where tenancy by the entirety will not work, or may not be the best option for you.

Reference
Alper Law: Asset Protection
Thomas Moens Law Offices, Tenancy by the Entirety

How to Avoid Being Sued by Your Creditors

Janice — Tue, 12 Jan 2010 19:17:55 +0000

This post should probably be (more accurately) called How to Stop Bill Collectors From Seizing Your Car, Your House, and your Personal Belongings. If they win a judgment against you, they will take your stuff. They will get a nice police office to come to your house and empty it of your belongings, and there won’t be a thing you can do about it.

You’re behind on your bills, the credit card companies and debt collection agencies are calling, and you’re at your wits end, worrying about when the court will order you to sell your car or garage sale off your furniture and clothing. You’ll only be allowed to keep your state exemptions. See this article on bankruptcy state exemptions for what you’ll be allowed to keep, and what the bill collectors will take.

It’s impossible for me to say for sure whether a credit collection agency will sue you. They might threaten to take you to court, but a lot of the time it’s just lip service.

Creditors are less likely to sue under these conditions

You make voluntary payments, even small ones (one of my friends pays $10 a month toward a $100,000 hospital bill).
You dispute the debt and come up with a reasonable defense
You owe less than $1000
You live more than two hours away from the creditor or credit collection agency
The creditor doesn’t generally sue people

On the other hand, some creditors are irrational, and will will sue for pitiful amounts of money. There are several situations where the bill collectors are more likely to sue you. If any apply to you, it’s not going to be enough to stop collectors from calling: you’ll need to take evasive action.

Reasons why you are more likely to get sued

The closer you live to a bill collector, the more likely they are to sue you in court and obtain a judgment.
You owe an amount of money more than it would cost them to sue you (usually around the $1,000 mark).
You haven’t paid anything on your debt. If a creditor thinks you might pay…even a little, they probably won’t bother with legal action.
You are dealing with your original creditor. JCPenney, Sears, and Littletown Credit Union won’t sure you. But GC Services and other shady collections agencies will.

In other words, if you owe a collections agency in California a thousand bucks, and you’re an hour’s drive away, they will sue you in bulk. One of their lowest ranking lawyer’s will be assigned to take a group of potential judgments (including yours) to the local courthouse. One way to avoid this is to find out where the collection agencies are located, then move. You don’t have to physically move: you just have to make them think you’ve moved. I wrote a whole article about tricking collection agencies into thinking you live somewhere else, you can find it by clicking on the link.

How to Stop Wage Garnishments

Janice — Thu, 19 Nov 2009 19:08:36 +0000

A writ of garnishment is when part of your wages are withheld and sent to your creditors. It can only occur after a court order following a judgment against you. If your employer receives a writ, there are stiff legal penalties for his failure to comply, so you won’t be able to stop the writ via your employer. There are, however, many things you can do to both prevent wage garnishment and to stop garnishment once it has started:

How to stop wage garnishments from happening in the first place

Avoid being sued in the first place. Great advice, but the fact is, if you’re reading this article, you’re likely to have been served a notice that you are facing garnishment (not to mention the underhand tactics lawyers use–see An Unfair Debt Collection).

If the garnishment is from the IRS, call them. If your wages are going to be garnished by the IRS (i.e. you’ve received an Intent to Levy or Notice of Levy letter, you must contact the IRS to set up a payment plan. Once they start garnishing your wages, you lose bargaining power. Make an appointment to see an IRS agent and ask for a reasonable payment plan.

Don’t give your creditors your correct employment information. Ever. Write “self-employed” or give a misspelling of your employer’s name and a wrong address. Your creditors want that information from you for one reason only–to get your money if you default on the agreement.

File for bankruptcy. Bankruptcy can, for some, be the best option. Losing 25% of your wages to garnishment can put a heavy burden on you for years, not to mention that your credit report will suffer just as badly as if you had filed bankruptcy. It’s worth a free consultation with a bankruptcy lawyer to figure out your options.

How to Stop a Wage Garnishment in Process

File a “Claim of Exemption” form with the court, if your wages are being garnished and you cannot afford basic necessities like housing, food, and heat. Obtain the form from your local courthouse, fill it in, and file. You’ll receive a hearing notice. Show up with proof of incomes and expenses.

Claim “Head of Household” if you support children and/or a spouse. This only applies in some states (like Florida). When you receive a writ, file a notice with the court that you are claiming a head of household exemption. This does not have to be an official form–just write a letter, take it to the courthouse, and ask the Clerk of Courts to put it in your file. You may have to attend a hearing to prove that you are entitled to this exemption.

Seek help from a Debt Settlement firm like this one.. Skillful selection of the right debt reduction company can cut your debt by half and stop garnishment. It’s likely that your garnishment is costing you hundreds of dollars a week, and the garnishments will continue until you’ve paid back every penny. With debt reduction, the garnishments will stop and you’ll have to pay back less money.

File for bankruptcy. Filing will put an immediate halt to the writ of garnishment in most cases. A bankruptcy lawyer will be able to tell you if bankruptcy will stop your garnishments.

Pay the debt in full. Yes, probably not likely (you are reading this because you can’t pay, or–like me–you don’t want to pay). But that’s one of the ways to stop garnishment.

Know Your Rights About Debt Collectors

matthew — Sat, 24 Oct 2009 12:37:06 +0000

As someone in debt, you have more legal rights than you could possibly imagine. In fact, debt collectors are extremely limited in how they can contact you. They are also greatly restricted on how they can get money out of you as well. Did you know that debt collectors can’t contact you at work, if you tell them that you aren’t allowed phone calls at work? That’s just one right you have: there are many more.

Your Rights as a Debtor

A debt collector may never harass you at any point in time, ever. What is “harassment”? Unethical and unreasonable behavior. Some examples: calling you multiple times a day, or sending you mail with Debt collection agency stamped on the front.
A debt collector cannot be deceptive with you under any circumstance (i.e. “You will go to jail if you don’t pay). However, the trouble is with this law is that they can tell you lies like “We’ll send a letter to your boss and ask for a garnishment.” You won’t be able to figure out what is a lie and what isn’t a lie: remember the golden rule when dealing with third party collection agencies: do not talk to them. They are trained professionals who will use any personal information you give them against you to collect money. You have nothing to gain, and everything to lose, by talking to them.
If you tell a debt collector not to contact you at work, they may never do it again for any reason. Don’t just tell them this on the phone: send the agency a certified letter, and keep a copy. Even better, send them a cease and desist letter telling them not to contact you at all: including at your workplace.
The only other person a debt collector can contact regarding your debt is your spouse and your attorney.
A debt collector may never use a false company name in order to try and obtain your debt. Debt collection agencies cannot call you and pretend to be a lawyer, a police officer, or other legal entity.

Though these are the basics, they cover a good amount of practices that are widely recognized as unfair. These practices are also banned by law by the Fair Debt Collection Practices Act (FDPCA). And unfortunately, collection agencies prey on people who are unfamiliar with the law. But fortunately for you, there’s a wealth of information on this website to help you understand what’s legal and what’s not.

But why would a collector become so hell-bent on extracting your debt out of you? Simple. Because they work off a commission. A debt collector gets a percentage of your total debt if they are able to successfully extract it from you. This may be as high as 90 percent of the debt. That can be a very large sum of money depending upon the amount of debt that you are in. If you don’t give them anything: they don’t earn anything.

The Federal Trade Commission regulates the policies and practices of debt collection in the United States. They are the oversight for the collectors and agencies in this country. Unfortunately, many debt collection agencies who harass do not get reported at all or they are reported improperly. Calling the police on a debt collector may land you with a false report fine and a warning. Report the abusive behavior to the Federal Trade Commission (FTC) and then sue your harassing debt collectors in court: the easy way. This video shows you how to file a report with the FTC:

If you’re a victim of bill collector harassment, take a minute or two after the phone call to cool yourself down. Once you feel your emotions are relatively stable, follow the directions in the video above to report the agency to the FTC. If enough people complain: the agency will be investigated and possibly shut down. Then read up on your rights in the FDCPA in Plain English article and if you’ve been wronged: don’t hesitate to consider going to court and winning, the easy way.

Gotta Love That Cease and Desist Letter!

matthew — Sat, 24 Oct 2009 02:18:19 +0000

The Cease and Desist letter, otherwise known as the C&D, is quite possibly the most powerful tool available in your arsenal of tactics against debt collectors. It is one of the most simple ideas yet, it throws a collector in a heap of legal bondage that guarantees they will never contact you again.

What is a Cease and Desist Letter?

If you don’t know what a cease and desist letter is, then you don’t realize the huge amount of power that has been bestowed upon you by the federal government in regards to your debt. This power not only protects you from being harassed, but it also gives you a medium in which to bring about a harassment lawsuit.

However, the C&D letter remains the utmost of importance with respect to tools. The C&D is a letter from you that states that a collection company must immediately “cease and desist” what they are doing; whether it is harassment, phone calls, or other unwanted behavior.

Cease and Desist Letters Stop Bill Collectors From Calling You

The best part is that if you send your debt collector(s) a C&D, they are legally barred from having any further contact with you. The only circumstance in which they may contact you after the C&D letter has been issued is if they are telling you that no further contact will be initiated or the credit company is planning on brining a lawsuit against you. Other than that, it is illegal and considered harassment if they call you again.

What to Do if a Debt Collector Ignores the Cease and Desist

If they do contact you again to collect money after you have served them with a C&D, then you should immediately report them to the Federal Trade Commission (FTC; www.ftc.gov). Then, follow the advice in this article on how to sue a debt collector the easy way and win.

The Power of a Cease and Desist Letter

Your debt will not go away until you either pay it, declare bankruptcy, or wait until the Statute of Limitations has expired on your debt. However, if you happen to win a lawsuit against your collector, you can use that money to pay off a good portion of your debts. You may be rewarded up to $1000 per infraction (an infraction would be a single phone call from a debt collector or a single letter), plus court and attorney fees.
Do not underestimate the power of a C&D letter. Taking five to write it may save you a lot of time, energy, and emotional stress. Plus, it might even get you some free money! Can’t beat that now can you?

Surprising Fact Debt Collectors Won’t Tell You: Your Debt Expires!

matthew — Fri, 23 Oct 2009 20:52:41 +0000

The Fair Debt Collection Practices Act covers your rights as a consumer in debt. However, this is not your only weapon in your anti bill collector arsenal. Debt collectors can only come after you for a set time period, until your debt expires. It sounds too good to be true, but it isn’t.

The Statue of Limitations is the law that allows your debt to expire and it varies from state-to-state. If you utilize some of the evasive tactics that this blog provides for you, then you can literally dodge your creditors left and right until the debt you owe expires.

The trouble with bill collectors is that even if your debt has legally expired, they won’t inform you about it as they are not legally required to do so. They will still try to collect the already expired debt, which you are not legally obligated to pay. If you make the mistake of paying them after your debt has expired, then they can legally keep the payment.

Check the Statute of Limitations

You can find a list of the Statue of Limitation laws by state here: http://www.carreonandassociates.com/articles/statute.htm. The Statute of Limitations is listed in years and is based on where the judgment was issued (it has nothing to do with where you live now). If you are being pursued by a creditor and have a judgment against you, the Statute of Limitations varies wildly. For example, if the judgment was issued in Georgia, your creditors can only come after you for 7 years but if you are unfortunate enough to live in Ohio you’ll have to wait a whopping 21 years until you’re in the clear.

Inform the Debt Collector That Your Debt Has Expired

Don’t bother informing the bill collector over the phone that the debt has expired. Send a cease and desist letter to the company informing them of the date of expiration (just add your state’s Statute of Limitations in years to the date of the judgment). Cite your state’s Statute of Limitations within the letter for reference. A letter informs the bill collector that if they do not cease their actions immediately, you will take legal action against them. Legal action against a bill collector is cheap and easy: you just file a form with your local small claims court. This article on How to Sue Bill Collectors will start you on the right path to legal action against abusive collectors.

State-by-state Statute of Limitations laws are one of the most powerful tools you have to fight collection agencies. It allows for a criminal lawsuit (harassment) to be brought up against a creditor and it nullifies and voids a person’s debt entirely if your debt is legally past-due. You won’t have to be harassed while you wait for your debt to expire:

The Fair Debt Collection Practices Act FDCPA in Plain English

Janice — Fri, 09 Oct 2009 14:22:53 +0000

Congress enacted the Fair Debt Collection Practices Act (FDCPA) to address the “abusive, deceptive, and unfair” practices of debt collectors. This article tells you what credit collection agencies can (and cannot do).

§804. Finding Where You Live

This section of the act says the collection agency can call your friends and relatives to find out where you are. But:

They can only contact them once.
They cannot say that they are in the debt collection business (exception: if your friend or relative asks who they work for, they must tell them).
They cannot tell your friends and relatives that you owe money.

§ 805. Communicating With You

A debt collector can’t contact you after 8 o’clock p.m. and before 9 o’clock a.m., your time.
They can’t contact you (or your friends or relatives) at all if you are represented by an attorney.
They can’t contact you at your job if your employer doesn’t allow it (you’ll need to tell the agency that your employer doesn’t allow phone calls).
If you write a letter to the agency asking them to stop communicating with you, they must not contact you either by phone or mail (see my post on how to send a collection agency letter

§ 806. Harassment or abuse

A debt agency can’t threaten violence or anything else illegal.
They can’t call you repeatedly during the day, although the law doesn’t actually say what is reasonable.
They cannot use profanity.
They cannot place public notices in newspapers with “deadbeat” names.
Bill collectors have to identify themselves to you when they call.
They cannot make hang up calls or engage in heavy breathing calls or other harassing behavior.

§ 807. False or misleading representations

A debt collector can’t lie to you. For example, they can’t pretend to be a government agency, attorney, or police officer.

§ 808. Unfair practices

A credit agency can’t tack on unreasonable fees or charges—they have to follow the law.
They can’t suddenly deposit postdated checks without telling you, and they can’t deposit a postdated check early.
They can’t call you collect.
They can’t threaten to take your house or car (unless they have a legal right to do so—like a mortgagee).
They can’t send you postcards or identify on the outside of an envelope that they are in the debt collection business.

§ 809. Validation of debts

If you write a letter to the agency requesting information about the debt, the agency must provide you with the amount of the debt and the name of the original creditor.
If you write and say that you dispute the debt, the agency can’t contact you until they have validated all of the information or obtained a copy of the judgment.

§ 810. Multiple debts

If you do send a debt collection agency a payment, they must post it to the account you specify, and they can’t post the payment to any account you are disputing.

§ 811. Legal actions by debt collectors

If a debt collector intends to bring action on you (say, to foreclose on a house), they have to take the legal action in the place where the property is located. In other words, they can’t sue to foreclose in Los Angeles if your house is located in New York.
If they sue you for something other than property, they have to sue you in the area that you signed the contract or in the place where you live.

§ 812. Furnishing certain deceptive forms

Basically credit agencies can’t send you a letter and pretend that you owe a debt to anyone else, or state that your debt has been sold to someone else when it hasn’t.

§ 813. Civil liability

This allows for heavy financial penalties if the debt collectors break the law.

§ 818. Exception for certain bad check enforcement programs operated by private entities

If you write bad checks you may not be covered by these protections. Often, bad check writers are dealt with by the District Attorney’s office and may face criminal prosecution.