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Cease and desist letters are a way for individual debtors to legally stop debt collection harassment. Debt collection laws prohibit debt collection agencies from contacting you in regards to a debt once a cease and desist letter has been received. While cease and desist letters are a very powerful tool for consumers, it's important to know the nuances of debt collection laws as they relate to the consumer. There are certain instances where a cease and desist letter can not stop the phone calls and letters, and there are also some things that cease and desist letters can not do.
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When to Use a Cease and Desist Letter
A cease and desist letter is not useful in all debt collection situations. Debt collection laws prohibit consumers from utilizing a cease and desist letter against an original creditor. For instance, if you owe Citibank $1,000 for a credit card debt, you can not send Citibank a cease and desist letter and stop the phone calls. Debt collection laws stipulate that cease and desist letters are only useful in situations where a third party collection agency or law firm is handling the collection of the debt. In the case of the Citibank debt, you could send the cease and desist letter once a third party collection agency started to call you.
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What a Cease and Desist Letter Can and Can NOT Do
Debt collection laws exist to make a level playing field for everyone. It would not be fair if a consumer could send a cease and desist letter and then be absolved from debt. A cease and desist letter only stops a third party collection agency from contacting you about the debt in question. Sending out a cease and desist letter does not make the debt go away. Once you send out a cease and desist letter you should still make arrangements to pay your debt or get in contact with the original debt holder for payment options.
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Sample Cease and Desist Letter
Debt collection laws stipulate specific wording that must be present in order for a cease and desist letter to be valid. Here is an example of a valid cease and desist letter from the Family Credit Management Services website:
Your NameYour AddressCity, State ZIP
(Sent via Certified Mail with Return Receipt)
Re: Account #
Collection AgencyAddressCity, State, ZIP
Pursuant to the Fair Debt Collection Practices Act, 15 U.S.C. section 805., you are hereby notified to cease and desist all further communication with me in regard to the referenced debt.
Failure to abide by this law will result in a complaint being filed against you with the Federal Trade Commission, the Attorney General of both your state and mine, and also your company management. I also reserve the right to file suit against you for any future violations of this law. I will record any phone calls if you fail to comply with this cease and desist.
Please make sure that you send this letter certified with a return receipt. Debt collection laws place the burden of proof on you, so if a collection agency claims you never sent a cease and desist letter you will need to prove that you did and that they received it. The only way to do so is with proof directly from the post office.