Ask Jack About Debt

Unsecured Debt of Under $1,000

Has your debt of under $1,000 been turned over to a collection agency?

If yes, then you have some choice as to what you want to do.

Your credit has already been "dinged" at this point (you should check to be sure by getting free reports from the three major Credit Reporting Agencies, but if your credit has already been harmed, and it is not important for you to keep you credit rating high, there is probably nothing more they will do to you.

No matter what, 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.

The good news is that collection agencies are federally regulated and you can stop them from contacting you. For details on what collection agencies may do, see "Fair Debt Collection Practices Act".

If you have decided that you want to make good on this debt in some fashion, go to collection agency debt over $1,000 section and read through. If you have decided that this does not matter to you, then simply send them the letter below. You can copy it here and paste it into your word processor to fill in the necessary details. Keep a copy and send it certified mail, return receipt requested. This will cost a few dollars but in most cases it will work. And if it does not, the collection agency is very likely to be in violation of federal law.



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.


  1. Since it is my policy neither to recognize nor deal with collection agencies, I will discuss this account only with the original creditor.
  2. This debt is under dispute. I do not think I owe what you claim.
  3. This debt was settled. Your records are incorrect.
  4. This debt is beyond the statute of limitations.
  5. This debt was discharged in bankruptcy.
  6. I have never been sent reasonable evidence showing that I owe this debt, as is required by law.


[[ your name and signature]]

This should stop all contact with the collection agency. The only things they can legally do are tell you that they will no longer contact you or call you into court - Read the Federal Fair Debt Collections Practices Act. With small debts they will usually not bother to take that step. They are much more likely just to drop it (no matter what they might tell you). I have seen a couple of cases where they set up a court date to put some pressure on the debtor but they never bothered to show up, so the case was dismissed.

Some things you should NEVER do when dealing with creditors.

  • 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.
  • 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.

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