When you should just tell your creditors to get lost.

If the amount you owe a creditor is low (certainly if it is under $1,000), and it is way past due, the best thing for you to do could be to send a “cease and desist” letter to the collection agency, and forget about it. Under federal law, a collection agency cannot contact you again once you have sent them a cease and desist letter unless it is to notify you they are going to court, and it is highly unlikely they are going to spend the money to take you to court for anything less than a couple thousand dollars unless they are convinced they can cover their legal fees in addition to the amount owed, which is very hard to do.

When I tell people this they respond that they are worried about what this will do to their credit rating. My response is that if the debt is old, their credit rating has already been dinged for non-payment and the repercussions will probably not be any worse if the debt is never paid. One can never be sure since credit rating formula are secret, but its a good bet they do not keep dinging your credit as a debt ages.

So, as a practical matter, it may be best not to worry about the law or the credit rating. Your task is simply to get the creditor off your back. The cease and desist letter will do that.

If the debt is just one of many such debts, and your total debt burden is swamping you, then you should seriously consider bankruptcy.

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