|Gary Foreman is a former Certified Financial Planner (CFP) who currently writes
about family finances and edits
The Dollar Stretcher website
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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 judgement is involved could be the cause of the
confusion. But it's also a good way for her to document how much was
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:
PO Box 740241, Atlanta GA 30374-0241; 800-685-1111
Experian, PO Box 2002, Allen TX
Union, PO Box 1000, Chester PA 19022; 800-916-8800
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
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
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.