Harrassing Collections Calls
Credit Card Debt
I would like to know exactly what my legal rights are concerning creditors contacting me at work. I have sent two written requests informing them that I cannot receive calls at my new job. I haven't made my "90 day" yet, and I am afraid that calls of this personal nature will threaten my job. I have told creditors this, and they don't seem to care (If I lose my job, how do they expect me to earn money to pay them?) I have an answering machine available and have asked them to leave a message for me. They lie and claim they do, but their messages are the only ones "not being recorded."
I am struggling to get out of debt from two credit cards, totaling under $2,000. Creditors demand I give them access to my checking account to make payments, but I've refused because I am afraid of what rights this would actually give them to withdrawal an amount more than I've specified (or can send at any one particular date). I've requested the dates the payments are due to be changed to match my pay dates, and the companies have refused. This creates a situation in which they have been charging at least $20 each time I miss a payment, even by one day.
I feel like I am completely without rights. The overwhelming majority of the debt is from the companies charging late fees. I have contacted different "credit counselors and debt managers" via the web, but most of these places charge at least $20 per month or more for use of their services, and won't guarantee a reduction or waiving of late fees from the companies.
I feel like I am a hostage, with no end in sight. Can anyone offer helpful suggestions?
Over the years I have either assisted individuals, or have responded to collectors in the following manner.
First, it is difficult to know why the continual harassment if the individual has made some attempt to respond to the need to repay on some basis. That is has he or she offered some form of payment. If this has not taken place I would then, prepare and send a letter with the words "WRITTEN WITHOUT PREDJUDICE" at the top of the letter. This is to convey to a court should the matter progress that distance that the letter or its words cannot be utilized against the writer in a court of law. What you are attempting to do is clearly enunciate what you are able offer by way of a repayment plan, which is somewhat akin to your Chapter 11, or our bankruptcy laws here in Canada. That is you go to the creditors with an offer.
If the individual can send $20 per month then so be it. Obviously, an attempt should be made to pay at least the interest, and preferrably some small amount of principal. Along with the offer send a cheque for the first payment with the words on the reverse of the cheque, "this cheque constitutes acceptance of a repayment plan as per letter of ........(date), when stamped or endorsed." Now you are not only showing good faith, but when the cheque is stamped or endorsed you have further evidence of your intent should the matter come to court.
Further, the individual should state in his/her letter that as of the mailing of this letter and cheque you will not accept any further telephone calls in any manner, and if said calls continue they will constitute "harassment under the law," and be reported accordingly. Finally, ask for a reply within 15 days, otherwise the individual deems acceptance of his/her offer.
I can assure the individual if the documentation, and the letter written in a diplomatic, but firm fashion doesn't get some reaction or a satisfactory response I will be very surprised. At this point, the individual has done nothing more than clearly indicate his/her intent and abilities to pay.
Dennis E. H
MaSc, CFP, CLU, CHFC., Chartered Financial Consultant
Waterloo, On. Can
Your rights vary depending on if your collection is from the primary creditor or a third party collector, i.e. a collection agency. Although, in either case you have rights.
I hope that this is of some assistance. I am a Collection Manager for a Law Firm in Virginia and YOU DO HAVE RIGHTS.
I am not a lawyer, and neither do I play one on T.V., but I can point this poor soul to some legal relief. Here are my best answers to the questions posed and some (hopefully) helpful Internet links.
"I would like to know exactly what my legal rights are concerning creditors contacting me at work. I have sent two written requests informing them that I cannot receive calls at my new job. ..."
You need to write a letter. According to The Fair Debt Collection Practices Act, a debt collector may not contact you at work if you inform them that your employer disapproves. In addition, you may tell the collector (in writing) to stop contacting you at all and by virtue of this same Act, they must cease all contact with you except to acknowledge your letter or to tell you the creditor intends to take a specific action, such as take you to court or impound a possession if it was used as collateral for a loan (for example, a car). You must address this IN WRITING: verbal accounts (telephone calls and the like) will not hold up.
Furthermore, The Fair Debt Collection Practices Act forbids a creditor from making repeated phone calls to annoy the debtor and from calling and not identifying themselves.
"...I've requested the dates the payments are due to be changed to match my pay dates, and the companies have refused..."
I would offer to send them a series of post-dated checks that they may cash as they become valid. I can't guarantee this will work, but it might convince a creditor of your good faith in the arrangement.
"...I feel like I am completely without rights...." You do have rights. First look up the laws (here's a helpful link: http://www.law.cornell.edu:80/uscode/15/ch41.html --look under Subchapter V for Debt Collection Practices.)
"...The overwhelming majority of the debt is from the companies charging late fees...." I know you've tried to talk to them before, but you have to try to talk to your creditors again. Many people have a difficult time talking "live," whether it's on the phone or in person. Your letter to "The Dollar Stretcher" proves you can write well; why not write your creditors letters and explain your situation just as you did here. They don't HAVE to help, but they might. Come up with some options and present those options.
I don't know how big your monthly payments are right now, but if I were you I'd take every penny I could (every cent after basic food and housing and before movies, cable TV, and convenience foods) and apply it to debt. When I discovered that I was unpleasantly in the red, I started eating a lot of beans until I could get my debt paid off. Boy, can I whip up a great dish of beans! But you have to remember that you can't have it all--you must make sacrifices to pay back this debt.
I have contacted different "credit counselors and debt managers" via the web, ..." All these folks are going to do is negotiate for you. You can write well; you have access to laws and advice. Go through some back issues of "The Dollar Stretcher".
Be strong; with some hard work you can get through this.
Please hurry up and inform this unfortunate person about the free counseling available to anyone who needs it. It's called The Consumer Credit Counseling Service (CCCS), a national, nonprofit organization. They can help this person manage his money while reducing or eliminating debt. For the nearest office, (800) 388-CCCS.
I am not sure of the legal stuff, but these ideas work for me.
Many (but not all) debt collection company staff are paid by commission so the more money they collect and charge - the more they get paid. The intimidation on a $2,000 debt is no different than a $200,000 debt but the smaller one is "easier" to collect.
"Its so small. Why don't you borrow the money from a friend." Duh? If I'm going to have the same problem paying him/her as I am you - No thanks. I'd rather keep my friend.
I would recommend two books. The first is How to get out of debt, stay out of debt and live prosperously by Gerrold Mundis and the second is Money is My Friend by Phil Laut
Document *everything* about your willingness and ability to pay. Phone calls made and received - date, time, even length of call - issues discussed. Follow up letters. Cheques written, amounts paid, mailed with receipts. Paycheck stubs - everything!
Do not let them force you to make payments that are unreasonable. Here is a rule of thumb. 20% of income to debt, 80% for yourself <pay yourself first>.
Of that 20% pay creditors proportionately. One debt divided by total debt (all creditors) multipled by 100 = the PERCENTAGE of payment to that creditor. Share this information with ALL your creditors. "This is how much I owe, this is how much I can afford, this is how much your going to get. As my financial situation improves, more money will be used to pay this debt accordingly.
If you have $200 to pay 5 creditors and one debt is 55% of the total money you owe then that creditor gets $110. The other 4 creditors get their percentage accordingly. It doesn't matter if the debt is $2,000 or $1,000,000. If you only have $200 to pay, they get the percentage and THAT IS IT.
If you show them that you are making the best effort to pay and are able to document it accordingly they will stop hassling you. If they do decide to take you to court (unlikely) you have your "evidence" recorded.
Al "been there, done that" P
Please, whatever you do, DO NOT allow creditors access to your checking account. Once you have authorized a company to withdraw funds from your checking account, that company can withdraw any amount any number of times in a month, and you will have no control over it until after the fact. At that point, you will be facing legal fees and overdraft service charges from your bank in addition to your original debt.
This is for the reader facing annoying collectors at work. My husband and I were in the same position a couple of years ago and we got a great book by a guy named Banjamin Dover. He is extremely egotistical but he knows the laws regarding Fair Credit Act.
What I suggest is calling your collector from home once and telling them you have consulted an attorney and are fully aware that they cannot call you at work or at home if you do not want them to. Notate the time you talked to them and get names!! Tell them the only way they can contact you is by mail. Inform them that you are working on a budget and you will let them know when you have it all worked out. If they call you even one more time you can immediately call you local Attorney Generals office and explain the harrassment. You would be amazed how happy they will be to help you, the law really is on your side.
You should also consider immediately closing the account and making a deal with them regarding late fees and interest or look for a consolidation card with a lower interest rate.
Take the Next Step:
Sign up for our free eNewsletter Dollar Stretcher Tips.
Looking for an answer to a frugal living question? Click here to ask a
Dollar Stretcher Stretchpert!
Copyright 1996 - 2013 "The Dollar Stretcher, Inc." All rights reserved unless specifically noted.
Contact the Dollar Stretcher at:
PO Box 14160
Bradenton FL 34280
"The Dollar Stretcher, Inc." does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation.