After Bankruptcy Discharge

Debt Harassment

Reasons Not to Send a Cease and Desist Letter

The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. ' 1692c( c) provides for a writing to send “the debt collector to cease further communications with the consumer.@ Some people refer to this as a ACease and Desist Letter,@ but the word “desist” does not appear in this section of the FDCPA. People send this to stop a debt collector from contacting them, but I have found it may get the consumer sued in state court on the debt. There are other problems.

The most important misunderstanding that occurs is that consumers send a Acease and desist letter@ to the original creditor of a debt or on a collection that is not subject to the FDCPA. Except in rare instances, creditors are not subject to the FDCPA. There are also many types of debts that are not subject to the FDCPA. A debt subject to the FDCPA must have been incurred in a transaction primarily for personal, family, or household purposes. Courts have said that the collection of taxes, fines, child support, civil shoplifting claims, and torts are not subject to the FDCPA, because there was not consensual transaction involved. Perhaps Congress or some courts will change these more narrow interpretations, but that=s the dominant view.

If the consumer sends a Acease communications@ letter to the debt collector on a debt that is subject to the FDCPA, the collector must cease communicating on the debt. Thus, they may either sell the debt to another debt collector, which starts the process all over again, or sue the consumer in Court to enforce the debt. Perhaps the consumer would rather engage the collector in court, or perhaps the consumer would prefer that the collector not sue, as perhaps the collector may delay past the statute of limitations. In California, if the debt has been in default more than four years since the date of last payment, the debt is barred by the statute of limitations, and the California courts will not enforce it. Indeed, the FDCPA prohibits a debt collector from filing or threatening to file a lawsuit on a time-barred debt. This may require careful analysis, though, as payments or written promises to pay the debt may revive the four-year period.

The better approach, in my opinion, is to promptly (within 30 days of receiving the initial notice from the collector) dispute the debt or, if there is no valid dispute available, to send the debt collector a written request to validate the debt. So, mark your calendar and the envelope (which you should save) to record when you received the letter by mail. If the consumer disputes the debt or asks for validation from the debt collector within 30 days of receipt, the debt collector must cease collection of the debt until it mails a written notice that verifies the debt. Unlike a Acease and desist letter,@ the debt collector may not sue the consumer or sell the account to another debt collector, as these acts constitute collection of the debt. Until they verify the debt in writing, they must hold everything, under15 U.S.C. § 1692g(b).