A Debt Negotiation’s Cease & Desist Letters May Not Save Consumers

Jan 18, 2012   //   by Daniel Morris   //   Personal Debt  //  Comments Off on A Debt Negotiation’s Cease & Desist Letters May Not Save Consumers

The tactic of sending the cease and desist letter may be better left for extreme cases of harassment. In most cases, the cease and desist letter only leads to even more difficulties for consumers to navigate through, but it is a tactic that debt negotiation companies often suggest they can use to stop the collections calls. These companies may actually not be able to do everything they promise, or they will make the situation much worse.

What a Debt Negotiation Company Cannot Do

The Fair Debt Collections Practices Act (FDCPA) informs everyone of how collections agencies are required to act when they are performing their collections duties. This act does not prevent a collections agency from ever contacting the debtor if a cease and desist letter is sent, but some debt negotiation companies may suggest that they can make this happen. It may be in the debtors’ best interests not to hire companies making these claims.

When Collections Agencies May Contact a Debtor

A debt negotiation company may send a cease and desist letter to stop collections agencies from contacting their clients, but there are two different circumstances when these agencies can contact debtors, and they are:

1. When the collections agency is going to cease attempting to collect the debt
2. When the collections agency will embark on a new plan to collect the debt

Creditors Are Under No Obligation to Honor the Cease and Desist Letter

There is one thing that people need to keep in mind. The FDCPA pertains to collections agencies and not the creditor that hired them. This means that the creditors are under no obligation to follow the cease and desist letter. Unless they are operating in a state that has expanded the FDCPA to original creditors, these creditors can continue to make collections calls to consumers.

Collections Agencies Can Ignore the Letter

If the collections agency decides that it is not going to follow the FDCPA, it can continue to contact the debtors even though it has received a cease and desist letter. Although this is unlawful, a debt negotiation company has no remedy but to send its clients to an attorney.

The Next Steps

The next step for the original creditor after the collections agency has received a cease and desist letter is to hire another company or begin legal action against the consumer.

Rather than risk possible legal action, consumers can try credit consolidation before they hire what may be a questionable debt negotiation company. All of their debts will be eliminated, and they will have a much more affordable monthly amount to pay in their place.

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