Send a Cease & Desist Letter?
The federal Fair Debt Collection Practices Act (FDCPA) lays out the rules by which debt collectors are supposed to abide and the rights of Americans who are contacted by debt collectors. One such right you have is to send a “cease & desist” letter to a debt collector. Once that’s done, by law the debt collector may contact you just once more, and only for one of two reasons:
- To tell you there will be no further contact, or
- To let you know that it or the creditor intend to take a specific action, like filing a lawsuit.
Any further contact from the debt collector is a violation of the FDCPA, and the debtor can and should file a complaint with the state Attorney General and the Federal Trade Commission.
Debt Collection Tools
Let’s say you’re behind paying a debt you legitimately owe. A debt collection agency begins writing and phoning you. This may feel like harassment to you, but unless the collector violates the FDCPA, there’s little you can do about the contact except 1) pay the debt, or 2) do your best to ignore the collection activities.
A debt collector’s most persuasive weapon is a lawsuit. Through court action, a debt collector can gain authority to garnish wages or a bank account, or place a lien on a debtor’s property, which effectively prevents transfer of title. Most debt collectors take this step only as a last resort because it’s costly and a lawsuit may push a debtor into bankruptcy where the debt could be dismissed entirely, leaving the debt collector with nothing. Before legal action, debt collectors typically focus for considerable time on their favored tools: Repeated phone calls and letters.
Reasons Not to Send a Cease & Desist Letter
By sending a debt collector a cease & desist letter, you’ve effectively taken away all of its collection tools except a lawsuit. No more calls and no more letters, you’ve told the collector. You’re giving the debt collector two options: 1) Forget about collecting the debt and try to sell it to another collector (probably at a loss) or 2) sue you.
Giving a debt collector incentive to sue is a bad move. Through a lawsuit, the collector can gain court-authorized approval to do all sorts of things—garnishment is an oldie but goodie—that you likely will find extremely maddening. If you truly can’t pay the debt, you may feel compelled to file bankruptcy to survive.
When To Send a Cease & Desist Letter
If a debt collector contacts you about a debt, and you’re absolutely certain you don’t owe it, a cease & desist letter can do you no harm. Even so, you have the right to ask the debt collector for proof, or verification, that you owe the debt. Requesting verification is a good idea, even if you feel sure you don’t owe the debt. I’m often amazed at what my wife proves to me I’ve forgotten.
Secondly, a cease & desist letter may be appropriate if you’re certain an overdue debt has passed your state’s statute of limitations period so court authorized collection action is no longer possible. You can then force a collector to leave you alone by sending it a “cease & desist” letter without risking being sued. You still owe the debt, however.
Googling “debt collection cease & desist” will retrieve numerous templates.
Nothing above is legal advice. If you have any question about the best course of action, consult an attorney. Try Legal Services in your area.