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BY CERTIFIED MAIL [[date]] TO: [[ name and address of collection agency ]] FROM: [[ your name and address ]] RE ACCOUNT NUMBER: [[ account number if relevant. It should be on any letter you have received from collection agency ]] BALANCE DUE: [[ amount ]] I am in receipt of your collection letter, copy enclosed. Under the provisions of the Fair Debt Collection Practices Act, you are required to provide me with reasonable evidence of this debt. I do not believe the information you have provided so far qualifies under this act. If you believe I owe this money, I demand to see reasonable evidence. If you cannot provide that, please CEASE AND DESIST all collection efforts. Sincerely, [[ your name and signature]]
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Large Debt over 5 years old - the situation changes!
Like small debt that are over 5 years old, there are different rules for this type of situation.
If you have a debt of more than $1,000 and it has over five years old, you have come to be a "victim" of vulture collections. Debt doesn't have an official time limit, but in practical terms a debt will change status after a certain length of time. The original "owner" of the debt sells the debt to collection agency (often part of a law firm) that specializes in this type of debt - probably for pennies on the dollar.
The one caveat here is that if this debt is more than $1,000 it should never have gotten this far. Creditors usually do not write off debts over $1,000 (unless they are not much over $1,000) so easily. They usually do not get sold off for pennies on the dollar five years later. You might want to send them the following letter so that they give you more information on the debt and you can make sure its legit.
If the debt is real, you have to decide whether or not you want to deal with it. But even if you decide you do, DO NOT deal with the collection agency. If they call you, do not talk to them. My advice is that you do not talk to anyone from a collection agency, ever. They are experts at double talk and separating people from their money. You cannot trust anything they say. You should never deal with them.
If you think the debt is legitimate, send the collection agency the second letter, which should get them off your back, unless they decide to take you to court. Keep a copy and send it certified mail, return receipt requested.
If they do take you to court, SHOW UP, even if you cannot afford a lawyer. They may not show up, and you will win. If they do show up, the judge may be much more sympathetic to your situation than you might expect. It would be a good idea if BEFORE you get called to court you made some effort to make a deal with the original creditor. When you plan to make a deal with the original creditor, consider working with a Consumer Credit Counseling Service.
BY CERTIFIED MAIL DATE: [[date]] TO: [[ name and address of collection agency ]] FROM: [[ your name and address ]] RE ACCOUNT NUMBER: [[ account number if relevant. It should be on any letter you have received from collection agency ]] BALANCE DUE: [[ amount ]] You are herby notified, under provisions of the Fair Debt Collection Practices Act [15 USC 1692c], that you must cease and desist all communications with me after being notified in writing that I no longer wish to communicate with you. Therefore I demand that you stop calling me at home, at work, on my cell phone or any other location. In accordance with the federal FDCPA, now that you have received this letter, you may contact me only to inform me that you are terminating further collection efforts; invoking specified remedies which are ordinarily invoked by you or your company; or you intend to invoke a specified remedy. 1. You and your organization must CEASE AND DESIST all attempts to collect the above debt. Failure to comply with this law will result in my immediate filing of a complaint with the Federal Trade Commission and the Attorney General of [[insert name of your state]]. 2. Let this letter also serve as your warning that I may utilize telephone recording devices in order to document any conversations that we may have in the future. 3. Furthermore, if any negative information is placed on my credit bureau reports by your agency after receipt of this notice, I intend to pursue any and all remedies available to me by law by means of civil suits against you and your organization, both personally and corporately. Since is it my policy neither to recognize nor deal with collection agencies, I will discuss this account only with the original creditor. Sincerely, [[Your name and signature]]
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For the record:
- Rule One: Never deal with collection agencies
- Rule Two: When dealing with the original creditor, NEVER do the following:
1. Never Give them your checking account number. Even if they tell you they will take only one payment, they are very likely to keep drawing out money until their dent is paid. This can wreak havoc with your finances. Your checks will start bouncing.
2. Never Make a payment without a deal. They give you the impression that if you just send them $50 or $100 now, they will go away. Nothing could be further from the truth. Once they know that a phone call can get them cash, they will start calling more often. Never send money. Always offer to negotiate a payment plan. Push for stopping of interest and late fees in return for a monthly payment. Tell them they will get NO money unless they make a reasonable payment plan deal with you. They don't legal fees any more than you do, and if they think can settle the account without doing calling the lawyers, they will do so.