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When To Send Collectors a Cease and Desist Letter

past due bills

You’re getting phone calls at all hours of the day and night. You’re being harassed at work and you’re being verbally abused — as well as threatened — all in an attempt to collect upon a debt.

Why you owe the debt is irrelevant at this point. The agency trying to collect the money is in flagrant violation of the Fair Debt Collections Practices Act  (FDCPA) and you need to shut them down to regain your peace of mind. 

This could be when you should send a collector a cease and desist letter. Or, it might not be. There are some consequences of which you should be aware before doing so. 

What is a Cease and Desist Letter?

Simply put, it’s a written communiqué you send to someone attempting to collect a debt from you. Its purpose is to tell them to refrain from communicating with you while you figure out what you can do to resolve the situation, freed of harassment. 

It’s important to note the debt will still be owed and you can still be held responsible for it — in most cases (we’ll get to that later). The letter simply gets you a period of radio silence during which you can plan your next move. 

One more thing, original creditors are not bound by the FDCPA, so they can choose whether or not to abide by your request. Most do – but they aren’t required to do so like third party collection agencies and debt lawyers are.

Potential Unintended Consequences

A cease and desist letter says to the collector you aren’t willing to talk to them anymore. This could be construed to mean you’re not interested in negotiating a settlement, a credit card consolidation or any other solution to the situation. This can give them cause to either sell your account to another collector, or take you to court and sue for repayment. 

All sorts of untoward things can happen in court, including liens placed against your property, garnishment of your wages, attachment of your bank accounts and seizure of your income tax refunds. Meanwhile, if the debt is sold to another collector, the entire process will start over again, because your letter won’t apply to that new collector. 

When Should You Send One? 

Documented Harassment: In our scenario above, the collector is operating outside the bounds of the FDCPA, so sending them a letter and reporting them to the Federal Trade Commission and your state’s Attorney General are smart moves. This gets them off your back and opens an investigation into their practices. 

If you have strong facts proving a violation (multiple letters, records of multiple phone calls, testimony of coworkers who received phone calls and the like), you’ll also have leverage in debt settlement negotiations with the collector.

Time Barred Debt: Another instance in which it’s prudent to send a cease and desist letter is when the debt is too old to be taken to court. Creditors have a finite window within which to pursue legal action. 

They cannot avail themselves of any judicial remedies to get the money from you if it passes. While you do still owe the debt, you can choose to ignore it, assuming the resultant damage to your credit history isn’t an issue for you.  

The Debt Isn’t Yours: The final instance in which you should employ a cease and desist letter is when you’re being relentlessly harangued about a debt you do not owe. The FDCPA gives you the right to dispute any debt within 30 days of being notified of its existence. If you can prove it isn’t yours, the collector is required to leave you alone.

Knowing exactly when to send creditors a cease and desist letter enables you to use it effectively. Just be aware there are certain consequences and be sure you’re not in a position to be harmed by them.

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