Got first dunning letter, what should I do?

by Jack
(CA)

I recently received a demand letter from NCO for a very overdue credit card balance of $18,000 (their amount) to Chase bank. I was paying regularly until I lost my job last April. Since that time I also lost my home and am currently living in my car with no income.

This past week they have been calling my relatives and leaving messages on their machines. My mother is elderly and in poor health and they were asking her questions about me.

I want to pay the debt since it is mine but I'm in no position currently to pay it or to be harassed by these collectors. I don't want to declare bankruptcy.

I was thinking of responding to their letter by sending them a certified one, stating the facts, being honest, and just seeing what happens next.

Any thoughts, ideas, stradegies would be appreciated.

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Apr 26, 2011
 Dunning Notice On Debt You Can't Pay
by: DebtCollectionAnswers.com

Jack (part one of our response),

We're really sorry to hear what you are going through. Since this is a large amount of money, it's important for you to know your rights and to be proactive about your situation. The more you owe a single creditor or collector, the greater the risk that you will be sued.

The first thing you need to do is to at least read the first chapter of Debt Collection Answers online for free so you have an understanding of your rights when dealing with this collector.

The second thing we recommend you do is to make sure that you take notes every single time you talk with the collector. You can use our Free Debt Collection Worksheet for this purpose, or keep a notebook handy.

The next thing you want to do is to at least set up a free consultation with a bankruptcy attorney to find out what your options are. We know you don't want to file, but it would be really helpful for you to know if you are judgment proof. If you are (and it sounds like you may be) then there's nothing the debt collector could really do to get paid even if it did sue you. Having this information can bring you a little peace of mind while you focus on finding work, and it could be very helpful for you in deciding how to proceed.

For example, some consumers in that situation decide to send the collection agency a cease contact letter asking them to stop contacting them.

While this may have potential consequences such as leaving the collector with no other option than to sue, there are times when it makes sense. If you've met with a bankruptcy attorney and determined that you are judgment proof then you could tell the debt collector in your letter that you have met with a bankruptcy attorney, that you have no way to pay the debt, and that you are trying to avoid bankruptcy. Sometimes, that may be enough to get the debt collector to back down because they realize there's nothing to go after. (That's not legal advice, of course, and it's not guaranteed. It's just one avenue to discuss with the attorney.)

(Please continue reading our response in the next comment. We've run out of space here.)
Apr 26, 2011
 Dunning Notice Part Two
by: DebtCollectionAnswers.com

Jack - this is part two of our response:

As far as the calls to your mother go, if she is not a cosigner on this debt than she should not have to put up with frequent phone calls about the debt. You can help her write a letter to the debt collector instructing them not to contact her again about this debt. She can state the letter that she is unable to provide any additional information about your location or your ability to pay the debt. Send that letter by certified mail return receipt requested. If the debt collector contacts her again after it receives her letter, you should contact the consumer law attorney immediately. (You do not have to send this letter in order to get help from the consumer law attorney. Depending on what the debt collector said to your mother, it may have already broken the law, and the attorney can help you decide how to proceed.)

If you think the debt collector has broken the law, you can contact a local consumer law attorney with experience in debt collection cases. Find out how to get FREE or low cost legal advice about debt collection from a consumer law attorney here.

Hang in there. We hope this helps!

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