Will a cease and desist letter cause creditors to start legal proceedings?

[Emmy]

If you've been reading my posts, you know that very soon we will be unable to continue to pay on our cc's. While trying to find out more about cease and desist letters to stop them from possibly calling my husbands work, I came across this info on Ihatedebt.com:

When a collection agency receives a cease and desist letter they may move the account to legal status. This means that if they intend to sue you if they can't collect on the account the cease and desist letter will prompt them to bring suit immediately.

Obviously we don't want them to take legal action asap against us. We don't care if they try to call our house 50xs a day but my husband is concerned about losing his job if they call him at work frequently. I thought I read on here that the employer can say you are not allowed calls at work. Can that be done over the phone by the employer without a cease and desist letter? Do the creditors have to stop if employer says that?

[HHM]

Regarding the employer issue...the employer does not have to tell them, you husband can tell them, and do it over the phone (he should note the date and time of the call).

You can send a limited cease and desist letter, telling them that your husbands employer does not allow personal calls at work and to stop calling.

Question...are they calling your house yet?

It might be true that a collection agency may move faster to sue upon receipt of a full cease and desist, it makes logical sense, but not much business sense, collection agencies don't make money off the law suit so they would rather not do it.

[Emmy]

No they aren't calling yet. I just like being as prepared as possible for what might happen.

After figuring our bills for next month, most unsecured debt will stop getting paid the end of Nov, first of Dec. We will file bk the start of April, so that leaves appox. 5 months for collections.

[Spartan]

If you tell them they can't call at work, but they can call the house, well, then they can't call at work. They will just have to stop calling the work place. Document every thing. Keep record and proof. If they violate the statute, you may be entitled to compensation. (Wouldn't that be an irony?)

Don't tell them you are not going to pay. Tell them you are working on making payment. But that they can't call the office, as that would make them inviolation of the law.

This will buy you time.

In my case, I remember them sending tons of letters, over a 6 months period (or may be more, I don't quite remember the details). They made offer to settle for 75cents on the dollar, as if I have 50K sitting around. The lawsuit didn't come until like more than 6 months later. They got a judgement and I have nothing to pay them with. Life goes on.

Thanks to HHM's input, I am planning on filing, just to clean the slate, once and for all.

[no_it_all]

Note that the law applies to <collection agencies> not the original creditor. For example, if Citibank is calling you, a letter isn't necessarily going to do much, since Citibank is the creditor, not a collection agency. If it is a <collection agency> doing the calling, the letter (legally) should do the trick. Until of course they sell it to another agency and you get to start all over again...

[GoingDown]

In response to the question of whether sending a cease and desist letter speeds up the collection process and leads to a quicker lawsuit against you-- it's a myth. For the most part, there is a set amount of time in between account delinquency and the lawsuit phase, and nothing you do short of either paying it off or filing for BK will change anything. Most of the time, junk debt buyers-- not the original creditors-- will be the ones who file the lawsuits against you, and usually they file just before your account runs out of the statute of limitations. Of course, it varies from creditor to creditor and depends upon how much you owe and whether or not they can verify whether you are employed and whether or not you have assets to take.

For example, if your credit report lists your current employer and they can call them and verify that you work there, then you become a very good candidate for a lawsuit because they can garnish your wages to get paid.

Or if your credit report lists a home loan, you go to the top of their list for a lawsuit, because they can put a lien on your home and get paid if you try to sell it or refinance it.

On the other hand, if you're self-employed and rent your home, they know you will rather difficult to collect from and they tend to put you on the bottom of their list, and wait until later to file a lawsuit.

Of course the longer they wait, the more interest charges, late fees, etc., they get to tack on to the lawsuit, so they don't mind waiting.

[treehugger1]

And, check your state statutes. In my state the maximum % interest that can be charged is 9% apr for collection agencies. I'm close to having to file for BK 13, and I'm not concerned about 9% when many of my cc's went to 15%+. So, a few months of consideration can be bought in my case.

[Spartan]

In response to the question of whether sending a cease and desist letter speeds up the collection process and leads to a quicker lawsuit against you-- it's a myth. For the most part, there is a set amount of time in between account delinquency and the lawsuit phase, and nothing you do short of either paying it off or filing for BK will change anything. Most of the time, junk debt buyers-- not the original creditors-- will be the ones who file the lawsuits against you, and usually they file just before your account runs out of the statute of limitations. Of course, it varies from creditor to creditor and depends upon how much you owe and whether or not they can verify whether you are employed and whether or not you have assets to take.

For example, if your credit report lists your current employer and they can call them and verify that you work there, then you become a very good candidate for a lawsuit because they can garnish your wages to get paid.

Or if your credit report lists a home loan, you go to the top of their list for a lawsuit, because they can put a lien on your home and get paid if you try to sell it or refinance it.

On the other hand, if you're self-employed and rent your home, they know you will rather difficult to collect from and they tend to put you on the bottom of their list, and wait until later to file a lawsuit.

Of course the longer they wait, the more interest charges, late fees, etc., they get to tack on to the lawsuit, so they don't mind waiting.

So they may file just before SOL runs out? Even when the SOL is 6 yrs?

This is just for curiosity sake. I am definitely filing to wipe the slate clean.

[davids]

Creditors

If you've been reading my posts, you know that very soon we will be unable to continue to pay on our cc's. While trying to find out more about cease and desist letters to stop them from possibly calling my husbands work, I came across this info on Ihatedebt.com:

When a collection agency receives a cease and desist letter they may move the account to legal status. This means that if they intend to sue you if they can't collect on the account the cease and desist letter will prompt them to bring suit immediately.

Obviously we don't want them to take legal action asap against us. We don't care if they try to call our house 50xs a day but my husband is concerned about losing his job if they call him at work frequently. I thought I read on here that the employer can say you are not allowed calls at work. Can that be done over the phone by the employer without a cease and desist letter? Do the creditors have to stop if employer says that?

If it has just been months, then I would think you have not much to worry about, I have been on the creditors hit list for about 2-3 years now, and they have not made much of an effort, nor has any of them filed anything as of yet...

[CindyLou]

I sent c&d letters to all of my creditors back in 2002! I didn't file until 2005 and went many many months without calls and then when I would get one I would ask for the correspondance fax #...fax the letter right over and nothing again. It really worked for me and I didn't get any judements started either. So good luck!!