Monday, September 22, 2008

How to avoid being harassed by a debt collector:

1. Deal with your creditors before you are referred to a collection agency. Call the creditor to explain your situation. Make sure that you actually owe the money. Do not make promises you can't keep, such as making a payment on a certain date, when you know you will not be able to make the payment.

2. Send a letter via certified mail. Keep a copy of it.

Here's a sample:

Dear Sir or Madam:

I am writing to request that you stop contacting me about account number _____ with (name of creditor) as required by the Fair Debt Collection Practices Act 15 U.S. C. section 1692c (c). (Note: Delete reference to the Act where the letter is to the creditor instead of a collection agency.)

(Describe any harassment you have received. If appropriate, include information about why you cannot pay the bill or do not owe the money.)

This letter is not meant in any way to be an acknowledgment that I owe this money. I will take care of this matter when I can. Your cooperation will be appreciated.

Note: Even though it is against federal law, not all debt collectors will stop harassing consumers. If this is the case, contact us.

3. Contact a Lawyer.

If your letter doesn't stop the harassment, a letter from a lawyer should. The lawyer may be able to raise legal claims for violations of the federal law that prohibits debt collection harassment. Federal law states that collection agencies cannot contact consumers represented by lawyers. This does not apply to creditors collection their own debts, but creditors usually abide by the law as well.

4. Negotiate with the creditor.

Its better to negotiate with a creditor before the debt is sent to a collection agency, but you may be able to work with the collection agency.

5. Raise complaints about billing errors.

If the collection letter contains an error, write to the company and request a correction. Consumers have the right to dispute a debt. Collection agencies must tell you the steps to take to dispute the date during the first contact or within five days of the first contact. If the consumer disputes the debt in writing within 30 days, the collection agency must stop collection efforts while it investigates the debt.

If the debt involves a line of credit, a credit card, or an electronic transfer of money, you have the additional legal right to require the creditor to investigate the bill.

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