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Debt
Collection
by Gary Foreman of The
Dollar Stretcher
Dear
Dollar Stretcher,
I had an outstanding judgment against me for $1,000 to pay off
an apartment lease that was broken when my ex-husband and I
divorced. The total amount owed prior to the judgment was $1,700.
The third-party collector who's been calling me insists
that I pay that amount. The court said I owe $1,000 which has
been paid in full. What
can I tell the collector to make him go away?
Sheri
Fortunately
for Sheri she can take control of this situation without too
much trouble. Her biggest ally is something called The Fair Debt
Collection Practices Act. It's a federal law that governs what
debt collectors can do.
It's
easy to get a bill collector to stop calling. All Sheri needs to
do is to notify them in writing that she doesn't want to hear
from them anymore. She doesn't need to give them a reason. A
simple "please don't contact me anymore" is
sufficient. Certified mail is best. After the letter is received
the collection agency can only contact her to let her know that
they won't be calling her again or to inform her of pending
legal action.
Even
if Sheri did still owe the money, she has quite a bit of
protection under the law. The same request to stop calling works
even if you still owe the debt. Obviously stopping the calls
doesn't relieve you of the responsibility of paying your debt.
Collection
agency tactics are regulated by the Fair Debt Act. It's
acceptable for them to contact you by mail, phone, in person or
by telegraph. But they cannot call before 8am or after 9pm. If
you tell them that your employer doesn't approve of personal
calls, they can't contact you at work.
They
can't embarrass you. They can only ask others for your phone
number or mailing address. They can't say that you haven't paid
your bills.
When
they contact you they cannot use foul language. No physical
threats to you or your reputation. They can't say that you'll be
thrown in jail or demand a post-dated check. In short, all they
can really do is bug you a bit to collect the debt. Please
understand that we're not saying that Sheri or anyone else
shouldn't pay their debts. We're just pointing out that you
don't need to tolerate abusive collection practices.
Getting
the debt collector off her back is only the first issue for
Sheri. The second one is to make sure that her reputation isn't
being harmed. She'll need a good report the next time she
applies for credit.
Sheri
needs to find out why she's being contacted by a collection
agency. Either the landlord isn't aware that she's paid them
fully or there has been a miscommunication between the landlord
and the collection agency. The fact that a judgment is involved
could be the cause of the confusion. But it's also a good way
for her to document how much was owed.
In
any case, Sheri's credit rating could be seriously hurt if
incorrect data is allowed to stand without challenge in her
credit file.
To
find out what's in her file she'll need to get a copy of her
credit report. It'll cost about $8.50 depending on where she
lives. There are three large credit rating companies. Sheri can
order the report by phone and pay with a credit card. They can
be found at:
Once
Sheri gets the report she'll need to make sure that the lease is
either not mentioned at all, or is shown as closed by full
payment. If her landlord wasn't a corporation it's possible that
she won't find an entry in the report.
If
she does find that it shows the lease as still owed or in
dispute, she'll need to write two letters. One to the former
landlord asking him to notify the credit bureau that he's been
paid.
A
second letter to the credit reporting agency should explain what
happened. Sheri will want to include copies of the court
decision and her cancelled check proving payment. At that point
the credit reporting agency will be required to change the
status of the entry and include her side of the story.
Since
Sheri is recently divorced she should also check the credit
report for any other problems that might relate to her
ex-husband. Problems can occur when couples split. Just because
your ex said that he would pay a bill on a joint account doesn't
mean that it was actually paid. It's a lot easier to get things
straightened out before the collection agencies start to call.
Sheri's
in a pretty good position to solve this problem. One letter will
stop the harassing phone calls from the collection agency. And a
check of her credit report will make sure that she doesn't have
problems with this the next time she wants to apply for credit.
Gary
Foreman is a former Certified Financial Planner who currently
edits The
Dollar Stretcher website. You'll find hundreds of free
articles to stretch your day and your budget. There's even a
free weekly ezine. Visit Today!
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