Recently, someone asked me about how to stop a debt collector who had contacted him about a debt that had been wiped out 21 years ago in bankruptcy. Fortunately, most debts don’t last forever, and there are perfectly legal ways to stop debt collectors. Here are four:
1. Settle the debt. It may sound obvious, but paying a debt can be a good way to stop debt collectors. Most likely, though, if you haven’t paid a debt, it’s because you can’t afford to. Don’t let that stop you. Many collectors are willing to settle debts, sometimes for pennies on the dollar. After all, they would rather get something than nothing. Just be sure to get the terms of the deal in writing before you pay. Otherwise they may treat your settlement as just a partial payment. The agreement should state that your payment will be accepted as payment in full and the balance will be zero.
2. Send the debt collector a “cease contact” letter. Under the federal Fair Debt Collection Practices Act you can stop debt collectors from continuing to contacting you by sending them a letter asking them to do just that. Once they receive your letter (send it by certified mail so you have proof of receipt), they can’t contact you again except to notify you that they are taking legal action against you.
However, be careful. This strategy is fine if you are confident you don’t owe the debt, or that it is too old for you to be sued over it. If not, sending a cease contact letter may leave the collection agency with no option but to sue you.
3. Sue the debt collector. Debt collection lawsuits are on the rise, and I am not just talking about collection agencies suing debtors. Consumers who believe that debt collectors have crossed the lines are turning the tables on collection agencies and suing them for violations of the federal Fair Debt Collection Practices Act, or for breaking state debt collection laws.
I am not advocating frivolous lawsuits, but if a debt collector is harassing you, making illegal threats, or damaging your credit rating over a debt you don’t owe, talk with a consumer law attorney. He or she may be willing to take your case on a contingent fee basis. If you win, the defendant can be ordered to pay the attorney’s fees. (Many of these cases settle out of court.)
4. File for bankruptcy. You may have heard that bankruptcy is the option of last resort. But if you are being hounded by debt collectors, don’t wait until you are sued to consult an attorney. If you file for bankruptcy protection, collection calls will stop immediately. But even if you don’t, a bankruptcy attorney can explain what property and assets the collector can (and cannot) go after to collect from you, as well as help you evaluate your options.
More Resources:
Gerri Detweiler’s mission for the past twenty-two years has been to help consumers find reliable answers to their credit questions. She has authored five books, including Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights. Consumers can read the first chapter online for free at DebtCollectionAnswers.com. She also serves as personal finance advisor for Credit.com.
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