Many of you have passed the point of negotiating with your creditors and find yourself in a situation where your phone rings every day, mail (sometimes certified) arrives at your home or office, and you may have even received a lawsuit. . There are several things you can do to protect yourself, your funds, and your credit right now, but you need to be diligent about how you approach each scenario. Let’s take them one at a time.
1) Prevent collectors from calling: This doesn’t take much effort, but it is essential to maintain a calm frame of mind during difficult times. The FDCPA (Fair Debt Collection Practices Act) provides some relief for those who need to stop harassing calls to their home or workplace. In particular, the first thing to do is stop phone calls. To do this, you need the mailing address and perhaps the fax number of the collector or creditor along with the account number or reference number assigned to your case.
Once you have their address or fax, build a very simple letter. Be sure to send it by certified mail with a return receipt requested. The calls will stop, and if not, you can send a copy of the letter and the certified receipt to the FTC or your state agency for help with compliance.
To: Company name
From: Your name
Date:
Re: Account number or reference number
Please note that in accordance with section 805 of the FDCPA, I do not want to be contacted by phone at home or work for any reason. Also, please accept this letter as my written dispute of the alleged debt as provided by law. I respectfully request the following.
1) Copy of the original signed contract (if applicable)
2) Copy of all bills or statements (and receipts if credit card debt)
3) Copy of any payment bearing my signature
4) Copy of any claim notices (collection letters/late notices)
I expect them to be sent to me by US mail within 30 days of receipt of this letter.
Thank you, ______________
2) Handling Lawsuits: It is important to remember that in most states a judgment can be collected (enforced) for up to 20 years. It can only stay on your credit report for 7 years from the adjudication date (the date the court gave your creditor the judgment against you). Don’t ignore a claim, argue with the judge or creditor about it, or take it lightly. In most states, you have a specific amount of time to “respond” to the complaint. If you do not respond, most states will enter a default judgment against you. That means you ignored it and they (the creditor) won. Game over.
Instead, the best thing to do is talk to an attorney. Be sure to file an answer through your attorney if you can afford one. Most attorneys will work with you and at least help protect you from default. The next step is to determine if the debt is in fact or not. If it is due, your attorney can negotiate a settlement and payments that you can afford without going broke. If you don’t have to, they can defend you. If you used the above letter and never received the requested documents and then file a lawsuit, you have a defense and need to show your letter and return the receipts to the attorney. If you did not use the above letter prior to filing, only an adequate affirmative defense response will do. If you can’t afford an attorney, I suggest you consult one anyway, and then research your state’s rules of civil procedure. You will need a form to respond with affirmative defenses and perhaps a motion to dismiss. Again, just one phone call to a lawyer here can be worth 10 times its weight in gold.
Most importantly, don’t ignore it. Do not contact the creditor or collector yourself by phone once you have received notice, and do not lie to your attorney about any part of the matter. They can’t help you if you leave information out. If you act promptly, you won’t be in default and therefore won’t have a judgment on your credit report destroying your creditworthiness.
Dealing with aggressive debt collection requires knowledge (read the law cited above), patience, diligence and, in some cases, professional assistance. Don’t lose your temper, you won’t solve anything and don’t make promises you can’t keep only to put them off for a week or two. That won’t help later.
more to come,
steve blisko
