How To Stop Paying Credit Cards Legally

How To Stop Paying Credit Cards Legally

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Introduction

Assuming you have amassed a large amount of credit card debt, you may be looking for ways to get out from under this financial burden. You may have heard that it is possible to stop paying credit cards legally, and while this is technically true, it is important to understand the ramifications of taking this approach before making a decision.

When you stop making payments on your credit cards, your account will eventually be turned over to a collection agency. The collection agency will then attempt to collect the debt from you through various means, including harassment, wage garnishment, and even legal action. However, there are certain laws in place that protect consumers from these aggressive collection tactics.

The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits debt collectors from using abusive, unfair, or deceptive practices when attempting to collect a debt. This means that, even if you have stopped making payments on your credit cards, the collection agency must still abide by the FDCPA.

Some of the prohibited practices under the FDCPA include calling before 8:00 am or after 9:00 pm, calling repeatedly or excessively, using threatening or abusive language, disclosing information about the debt to third parties without your consent, and failing to send written verification of the debt within 5 days of initial contact.

If a collection agency violates any of these provisions, you can take legal action against them. Additionally, even if the collection agency does not violate any provisions of the FDCPA, you can still request that they cease all communication with you by sending them a “cease and desist” letter. Once the collection agency receives this letter, they are legally obligated to stop all communication with you.

However, even though the collection agency must stop communicating with you, this does not mean that they will stop trying to collect the debt. In fact, once your account has been turned over to a collection agency, they may likely file a lawsuit against you in an attempt to collect the debt through legal means. If this happens, you will need to appear in court and defend yourself against the lawsuit.

While it is technically possible to stop paying credit cards legally by utilizing various consumer protection laws, it is important to understand that this approach should only be used as a last resort. Once your account has been turned over to a collection agency or legal action has been taken against you, it will likely damage your credit score for many years to come. Therefore, it is always best to work out a payment plan with your creditors before stopping payments on your account.

What You Need to Know About the Fair Credit Billing Act

What is the Fair Credit Billing Act?

The Fair Credit Billing Act is a U.S. law that protects consumers from unfair credit billing practices. The Act requires creditors to correct billing errors, limits consumer liability for unauthorized charges, and gives consumers the right to dispute charges.

The Fair Credit Billing Act was passed in 1974 in response to widespread abuses by credit card companies. Prior to the Act, credit card companies often engaged in deceptive and unfair billing practices, such as charging hidden fees, inflating prices, and making it difficult for consumers to dispute charges.

The Fair Credit Billing Act protects consumers from these abusive practices by requiring creditors to correct billing errors, limiting consumer liability for unauthorized charges, and giving consumers the right to dispute charges.

If you have been a victim of credit card fraud or abuse, you should contact your local consumer protection office or the Federal Trade Commission to file a complaint.

What are your rights under the Fair Credit Billing Act?

The Fair Credit Billing Act (FCBA) is a federal law that protects consumers from unfair credit billing practices. The FCBA gives consumers the right to dispute inaccurate or unauthorized charges and requires creditors to correct billing errors.

Consumers have the right to dispute any charge on their credit card bill that they believe is incorrect. This includes charges for merchandise that was never received, merchandise that was received but is not as described, and incorrect math errors.

If you have a dispute, you should notify your creditor in writing within 60 days of the date of the first bill containing the error. You should include a description of the error, your account number, and your name and address. You can use this sample letter as a template.

Once the creditor receives your notice, they must investigate and resolve the dispute within two billing cycles (but not more than 90 days). The creditor may require you to provide additional information to help with their investigation. If the creditor finds that there was no error, they will send you a written explanation of their decision along with a copy of any documentation used to make their decision.

If the creditor does find an error, they must correct it and send you a revised bill showing the corrected amount due. They may also take other actions, such as crediting your account or refunding any overpayment that you have made. In some cases, the creditor may decide to waive any fees or interest charges that resulted from the error.

How to Stop Paying Credit Cards

Credit card companies make billions of dollars every year by trapping people in never ending cycles of debt. The good news is that you can get out of this cycle and legally stop paying your credit card. This process is known as credit card debt settlement.

Step One: Notify the Credit Card Company in Writing

If you have decided that you can no longer make payments on your credit card, the first step is to notify the credit card company in writing. This notification should include your name, address, account number, and a statement that you are choosing to exercise your legal right to stop paying on the debt.

It is important to send this notification by certified mail, return receipt requested, so that you have proof of the date that you sent it. Once the credit card company receives your notification, they are legally required to take certain steps. First, they must send you a written acknowledgement of your notification within 30 days. This acknowledgement must include information about your right to resume payments on the debt and how to do so.

Next, the credit card company must notify each of the credit reporting agencies that you have chosen to exercise your legal right to stop paying on the debt. Once this notice is sent to the credit reporting agencies, your account will be reported as ‘charge-off’ or ‘account closed’.

Step Two: Cut Up Your Credit Card

Now that you’ve stopped using your credit card, it’s time to cut it up. This may seem like a drastic measure, but it’s important to take this step to help you break the habit of using credit. If you keep your card around, you may be tempted to use it again, and this can lead to more debt.

Cutting up your credit card also has psychological benefits. It can help you avoid the temptation to use credit, and it can serve as a reminder of your commitment to breaking the cycle of debt. If you find it difficult to cut up your card, try putting it in a drawer or another safe place where you won’t be tempted to use it.

Step Three: Send the Credit Card Company a “cease and desist” Letter

The following is a sample letter you can use to send to your credit card company. This is called a “cease and desist” letter, and it tells the company that you are no longer going to pay your credit card bill, and they need to stop trying to collect payment from you.

You will need to sign and date the letter, and keep a copy for your records. Be sure to send the letter “return receipt requested” so you have proof that they received it. You should also send the letter by certified mail so you have a record of when it was sent and received.

You will likely start getting collection calls after you send this letter, but do not engage with the collectors. Just tell them that you have sent a cease and desist letter, and they should not call you again. If they continue to call, you can report them to the Federal Trade Commission.

Conclusion

The best way to stop paying credit cards is to contact your card issuer and request a hardship program. If you are unable to make your payments, the card issuer may be willing to work with you. Many card issuers have hardship programs that can lower your payments or interest rate, or even waive late fees. If you are struggling to make your payments, don’t hesitate to reach out to your card issuer and ask for help.