Do It Yourself Debt Consolidation
A debt consolidation company is a great tool if you don’t have the time or the inclination to make a few phone calls, write letters and keep organized correspondence records. Otherwise, you can save hundreds more dollars by doing your own debt consolidation. Here are some of the letters you may need to get the job done right!
Video: Know Your Rights with the FDCPA
Debt Verification Sample Letter
A debt verification letter is particularly important if your account has fallen into collections and some other company, other than your initial creditor, is asking for the money. You have the legal right to ask for a debt verification letter that proves the collector is approved to collect this debt money from you. They should be able to tell you the name and address of the original creditor, how much money you owe, when your last payment was, what the interest and fees amount to and provide legal documents proving they’re authorized to collect. According to the Fair Debt Collection Practices Act, the collection agency has 30 days to send a debt verification letter. They are not allowed to contact you for collection until this has been sent to you, as long as you request it.
Stop Debt Collection Call Sample Letter
Sometimes the Stop Debt Collection Call letter is called a “cease and desist” letter. If you feel the debt collectors are harassing you, then you may formally request that all further communication happen by mail. This letter is especially helpful if the debt collection agency begins to call your family and friends as well. In your request, you should mention that you will file a complaint with the Federal Trade Commission and the State Attorney General’s office if your request is not honored.
Video: How to Stop Harassing Calls
Debt Dispute Sample Letter
Sometimes you’ll get a strange letter from a collection agency you’ve never heard of demanding your debt. In some cases, the debt is perfectly legitimate, but it’s taken the agency a long time to find you or the original creditor or the previous collection agency has sold off your debt to a new agency. You might not recognize the debt, so you’ll request a debt verification letter. If you receive the verification letter and the debt amount or the original creditor doesn’t add up, you can send a debt dispute letter to let them know you will not be paying this debt unless they can come up with better proof.
Statute of Limitations Sample Letter Follow-Up
It’s important that you check your credit report to see the date of the account and that you know your state’s statute of limitations. If enough time has elapsed, the collection agency may be trying to collect on an expired debt. Generally speaking, the statute of limitations for each state is between 3-10 years. Additionally, your credit report will have its own time frame for which a debt is considered valid. Most accounts will fall off your report after 7 years. Once the statute of limitations is up, the collection agency may still attempt to collect from you, but they won’t be able to take you to court, garnish your wages or put a lien on you. If you feel the collectors are violating the statute of limitations, you can write a letter stating you will not pay this old debt, which you can use to your defense if they do try to take action against you.
Debt Settlement Example Letter
You may also decide you don’t want to pay the total amount owed. As you’ve probably heard, collection’s agencies purchase your debt off the original creditor for mere pennies on the dollar, but they try to collect the full amount from you to keep a hefty commission for themselves. You can avoid this by sending a debt settlement letter. Often you can negotiate to avoid paying the late fees and interest you accumulated since these were finance charges, rather than actual legitimate purchases. You may also aim for a 40-70% debt reduction. The best way to get a large amount of debt reduced is to offer one or two large lump sum payments immediately to reconcile your debt.
Post Debt Settlement Sample Letter
Once you send your debt settlement letter, you should request a post debt settlement letter that says you have paid all that was owed and your account is now closed. This will protect you if the collection agency decides to continue hounding you for the rest of the money, claiming that no such settlement deal was ever made. Remember, verbal promises mean nothing in the court of law! Also, if you do not receive a post debt settlement letter, the collection agency may sell the remainder of your debt to another collection agency! Keep this precious letter in your records as proof of payment.
Judgment Proof Sample Letter
If you have lost your job or source of income, you may send a judgment proof letter to let them know your situation and why you cannot pay the debt. Let them know that you have no tangible assets and that you have proof of your situation. In this letter, you can refer to the clause of the Fair Debt Collection Practices Act that says the collection agency is not allowed to communicate further with you if you write and request them to stop calling.
Close Credit Card Accounts Sample Letter
You may assume that if you haven’t used or paid on a credit card in a long time that it’ll be automatically closed. However, this is not necessarily the case. You must write a formal letter with your name, address, phone number and account number asking them to close your account. While closing an account will decrease your credit score, it looks slightly better on your report if you initiate the closing, rather than have the credit card company shutting you down for nonpayment.
Debt Payment Agreement Example Letter
If you acknowledge the debt owed but simply cannot pay what the creditor or collection agency is requesting, you can write a debt payment agreement letter to let them know. Let them know how much you are able to pay and when. You can then ask for a call or a letter accepting your payment terms. As a show of good faith, you should include a check for the first payment. It’s always better to negotiate on your terms and writing a letter is the way to do so!
Reduced Payment Agreement to Creditors Example Letter
If you have spoken with creditors by phone and they have agreed to take a settlement offer or a reduced payment, then you should send this agreement letter as follow up. As a general rule, it’s always good to keep detailed records of all agreements made in writing so you can defend yourself in the courts if need be. Often times, creditors or collection agencies get away with unfair practices by taking advantage of disorganized people who rely on verbal promises for all agreements.
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