How to Handle Collector Calls

If you have an account past due more than six months and it has gone into collections, or if the account was charged-off after six months of non-payment and then sold to an attorney or other company, this is an important message for you.

If you receive a phone call regarding payment, do not execute a knee-jerk, emotional reaction by yelling, crying, swearing, or hanging up.

Likewise, do not ignore the call — even if you don’t have funds to pay.

Even worse, don’t send that letter circulating and offered for download on the Internet that demands that the collector cease and desist all contact. That is a huge mistake, and I cannot believe people are putting it out there as a free letter to print and use! Why?

If you send a cease and desist notice, the collector cannot contact you to discuss payment options; therefore, their only recourse is to SUE YOU IN A COURT OF LAW!

The cease and desist letter royally sets you up for a lawsuit.

Instead, be smart and be professional. Handle the collector call in one of these two ways:

  1. Explain in two sentences (no long stories) that you cannot pay at this time (if that is true), and ask them to contact you next month by mail only.

    By allowing them to communicate by mail, you keep a line of communication open other than going to court. And, because you have explained that you have no money to pay, they understand that suing you will not produce payment. Be prepared to show a bank statement to prove what you are saying is true; especially if it is a large sum of money. You don’t want to risk being disbelieved and sued. However, cut off the name, address, and identifying information of the bank and redact the account number, leaving only your name and balance information.

    2. The second option is to negotiate a settlement. It is the rare collector who will not agree to a lower amount so they can get something rather than nothing. Negotiating is both an art and a science. It is nothing to be feared. It is two adults discussing and coming to a business agreement. Keep your tone and language professional, and in so doing, you will be respected.

As part of your negotiation, you want them to agree to remove the negative account from your credit profile when they receive payment. Instructions on how to do this are in Chapters 15 and 16 here. Also in those chapters are actual scripts I used in the past to negotiate settlements for my clients.

It is extremely important that you keep your employment and bank PRIVATE. Never agree to automatic deduction. Never tell them where you work. Maintain control of your privacy as a safeguard against having your account garnished. You don’t need them getting their long, greedy fingers into your grocery or rent money!

If you have no funds to pay and request future communication by mail, do respond to the letters by providing an update on your financial status and ability to pay. The purpose of doing this is to keep yourself out of a lawsuit.

Finally, don’t get personally angry at the man or woman placing the call. They are just doing their job, which is to collect money on a past-due account.

When you purchased the goods or services, I am sure you intended to pay for what you purchased. But then, something went awry that prevented you from being able to keep your contract. Explain that, agree on a settlement, and everyone will be happy to get the account closed and done with.

Worst and Best Banks

Heads up! Is your bank on the list for cheating their customers most often?

I don’t know about you, but I refuse to give my business to a bank that illegally rips off their own clients! Why should I when there are honest, ethical banks in town?

If your bank is on the Worst List, I suggest you scrutinize your bank statement every month for errors and balance it with your own checking log. If you’re happy with them, fair enough; but if you see high fees, double charges, and over-charges, you can take your business elsewhere.


  1. Bank of America has the highest number of complaints for their checking/savings accounts. Their fees, terms and conditions, and policies earn them the title, #1 blood-sucking bank vampire. Even worse, BOA was caught charging overdraft fees for overdrafts caused by their own overdraft fees!!! *
    They also have the most complaints for their mortgage loans. As a mortgage broker myself, I have long refused to do business with wholesale BOA because of their horrid underwriting. I will not put my clients through that angst.
  2. Wells Fargo is #2 for most complains for their bank accounts. In addition, they were caught opening accounts in people’s names without their knowledge or consent. They were fined $185 million for that identity theft scam; and yet, they’re still in business. *


Every bank with top records for customer satisfaction, treating people fairly, and having good pricing was a small or mid-size regional bank. There are literally hundreds of good banks across America. Banks such as Bank of the Ozarks, Cathay Bank, CIBC, First Republic Bank, and UniBank.

When choosing a bank, pay attention to the terms, including monthly fees (many banks offer $0 fees if you keep a certain minimum balance), and see if you can earn interest on the balance. Admittedly, interest is really low right now, so if your balance is high, you might consider opening a Certificate of Deposit or consulting a financial advisor about investing. Overdraft fees should not apply to you — I don’t want anyone reading this to write a bad check, ever!

Financial responsibility includes creating a good credit record and a good banking record.

It is easy to do a Google search of complaints + (bank name) to see what people have to say about a particular bank.

*Source of complaints:

The New Typical Credit Score

A new report has come out that reveals the typical credit score for people buying a home and homeowners refinancing.

Considering the pandemic and the economy, would you guess people’s scores have gone up, down, or stayed about the same?

To provide perspective, during the Great Recession, the typical score for mortgage borrowers fell to 707.

Ready for the answer? Today, that number has risen to 788 — the highest score in the last two decades!

Only 10% of borrowers had scores below 688. What?!!?

This tells me that a lot of good folks who could qualify for a home loan don’t know that they can!

Top tier credit for getting the best interest rate on a FHA loan is 620.


  • Most lenders accept scores down to 600 for a 3.5% down FHA loan.
  • Most lenders accept scores down to 580 for a 5% down FHA loan.
  • A few lenders go all the way down to a 500 score for FHA. This isn’t the norm, so expect to pay a higher interest rate and show a good, stable income.
    Personally, I suggest raising your score to 580 or 600 before applying for a mortgage unless there was one weird circumstance that temporarily docked your score, and you are fully ready to take on homeownership.


If your credit score is lower than what you would like to see, don’t despair! Take control.

First, analyze why your score is low. Do you use too much credit? Was there a one-time hardship that you are now recovering from? Did you make a mistake by co-signing for someone? Or was it something else?

Once you have figured out the WHY, then you can take steps to fix or remedy that. If you aren’t sure of the WHY, shoot me an email explaining and I will address the situation in another post.

Meanwhile, go through Steps 1-5 to clean up bad credit in Chapter 2 of Repair Your Credit Like the Pros.


Chapter 12 tells you the quickest, easiest ways to raise your score.

Chapter 13 reveals how to get an awesome score of 800.

And if you need to negotiate a settlement on a charge-off or collection, don’t you say anything to anyone or pay a cent until you read Chapters 15 and 16.

Medical collections are the least damaging and one of the easiest to get deleted. Chapter 17.

And for people wondering if the whole idea of credit repair is even ethical, see Chapter 25.

When it’s too hot to get outside, it’s a good time to self-educate. God bless you and stay safe in the summer heat! Here in the Pacific NW, we are coming off a historic heatwave. Most houses, including my own, do not have air conditioning, so it has been a time of wearing a cold, wet towel around my neck in the afternoon and sleeping on an air mattress in the basement at night.

Statute of Limitations 2021 for Credit Card Debt

Each state has its own law for how long a credit card company can sue a person for non-payment. This is a good consumer protection, but then we have to ask, which state does the law go by?

Most of the major credit card companies tell you in the contract which state applies to their agreement. Others go by the state the consumer lives in — but not all. So be careful and speak with an attorney in your state if you aren’t sure. (Charts below.)

Three main things to know:

  1. Just because the Statute of Limitations is reached, it doesn’t mean they still can’t contact you to ask for payment. The debt doesn’t magically disappear; it’s just that they cannot force you to pay by going to court.
  2. A collector might still file a lawsuit in an attempt to collect, even past the SOL. If you don’t show up in court to tell the judge the debt is old, you automatically lose and the creditor automatically wins. Therefore, you must never ignore a summons to court.
  3. The Statute of Limitations is different than the date a debt ages off your credit report. A debt past the SOL can remain on your credit report for seven years from the date of first delinquency or last payment or last acknowledgement of the debt.

This chart shows major credit card issuers, which state law they go by for SOL, and the years they can sue in court.

IssuerStateYears credit card debt is collectible in court
American ExpressUtah6
Bank of AmericaNorth Carolina3
CitiSouth Dakota6
Capital OneVirginia*3**
US Bank******
Wells FargoSouth Dakota6
*Capital One says Virginia law rules, unless the cardholder’s state has a longer statute.**5 years if creditor produces signed account agreement and documentation of interest rate and repayment terms.***US Bank’s terms and conditions agreement specifies which state law should apply to arbitration, but not for other matters, such as unpaid debt.

Credit card debt statute of limitations, by state

StateYearsState statuteSource
Alabama3 yearsTitle 6 Ch.2 Sec. 37State law
Alaska3 years9.10.053State law
Arizona6 yearsHB 24121State law
Arkansas5 years4-3-118State law
California4 yearsCode of Civil Procedure S.337State law
Colorado6 yearsColorado Revised Statutes Title 13 S.80-103.5State law 2
Connecticut6 yearsChapter 926 Sec. 52-576State law 3
Washington, D.C.3 years12-301D.C. code 4
Delaware3 yearsTitle 10, Sec. 8106State law
Florida5 years495.11State law
Georgia6 years59-3-24State law
Hawaii6 years657-1State law
Idaho5 years5-216State law
Illinois5 years7Code of Civil Procedure 5/13-205State law
Scroll to 735 ILCS 5/13-205
Indiana6 yearsTitle 34 Art.11, 2-9State law
Iowa5 yearsCh. 614.1.4State law See note.14
Kansas3 years60-512State law
Kentucky5 or 15 years413.120 and 413.090Conflicting state laws 12
Louisiana3 yearsCivil Code Sec. 2 Art. 3494State law
Maine6 years14-205-752State law
Maryland3 yearsSection 5-101State law
Massachusetts6 yearsGeneral Laws Part III Title V Ch. 260-2State law
Michigan6 yearsCh. 600.5807.8State law
Minnesota6 yearsCivil Procedure Ch.541.05State law
Mississippi3 years15-1-29State law
Missouri5 yearsCh. 516-120State law
Montana8 years27-2-202State law
Nebraska4 years25-206State law
Nevada4 years11-190State law
New Hampshire6 years382-A:3-118 (g)State law
New Jersey6 years2A:14-1State law
New Mexico4 years37-1-4State law
New York6 yearsCivil Practice Law & Rules, 2-213State law
North Carolina3 yearsCivil Procedure 1-52.1State law
North Dakota6 years28-01-16State law
Ohio6 yearsCourts – Common Pleas, Ch. 2305.07State law
Oklahoma5 years12-95A(1)State law
Go to Title 12 and click on the link. Open the file and go to Section 12-95.
Oregon6 yearsOregon Revised Statutes, Civil Procedure Ch. 12.080State law
Pennsylvania4 yearsJudicial Procedure 42 Pa. C.S. 5525(a)State law
Rhode Island10 years9-1-13State law
South Carolina3 yearsCode of Laws Title 15 Ch. 3 Sec.530State law 8
South Dakota6 years15-2-13State law
Tennessee6 yearsTitle 28 3-109State law 9
Texas4 yearsCivil Practice and Remedies Code, S.16.004State law
Utah6 years78B-2-30910State law
Vermont6 years9A-3-118State law
Virginia3 years8.01-246State law. See note.13
Washington6 yearsRevised Code of Washington 4.16.040State law
West Virginia10 years55-2-6State law
Wisconsin6 years893.43State law 11
Wyoming8 years1-3-105State law
1On April 12, 2011, the governor signed House Bill 2412 into law. This bill amends Section 12-548 of the state code and makes the statute of limitations for credit card debt six years.
2Clicking on this link takes you to a third-party website. Click “I Agree” to the terms. Click on the Colorado Revised Statutes link on the left column. On the page that appears, type 13-80-103.5 on the search line and hit enter. Scroll down to and click on the link for 13-80-103.5 to go to the section.
3Go to Statutes, then Browse statutes, scroll to Ch. 926, Sec. 52-576.
4 Search by section number.
5 According to the Georgia Department of Law, appeals court cases have found the six-year period for contracts applies to credit card debt. See Phoenix Recovery Group Inc. v. Mehta, 2008.
6 An Illinois appeals court ruled on May 20, 2009, that a credit card agreement did not qualify as a written contract subject to the 10 year statute of limitations.
7 Court decisions have affirmed that card agreements qualify as written contracts with a 10-year statute of limitations. However, the state appeals court ruled in 2011 that the plaintiff must provide the debtor’s actual agreement, not a generic agreement. If the debt collector can’t produce an original credit card agreement, the five-year clock for nonwritten contracts applies, the court ruled. See Gemini v New, 2011.
8 At “Quick Search” section select “Code of Laws” from menu and type “15 3 530” into search window, without dashes; press “Enter.” In search results, select link for “Chapter 3.”
9 Clicking on this link takes you to a third-party website. Click “I Agree” to the terms. On the page that appears, type 28-3-109 on the search line and hit enter. Click on the item for 28-3-109 for “Contracts not otherwise covered.”
10 Utah courts generally apply law of the card issuer’s state.
11 See section 893.43.
12Conflicting state laws and a lack of definitive court ruling make it too hard to say whether Kentucky’s five-year statute or its 15-year statute applies to credit card debts.
13Three-year expiration applies to unwritten contracts; courts may apply five-year clock for written contracts if creditor produces signed account agreement and documentation of repayment terms.
14The 10-year expiration for written contracts could apply if the creditor was able to produce sufficient documentation of the amount of the debt. In practice, however, creditors have only general descriptions of the account, such as the terms and conditions, which fails to meet the standard for a written contract of debt.

One of my book readers was sued for an old debt. Wisely, she contacted a local attorney who accompanied her to court. Not only did the attorney get the case dropped, the attorney then proceeded to file a lawsuit against the creditor for violations of the Fair Debt Collection Practices Act, and my book reader ended up GETTING MONEY from the bad collection company. Ha! That’s what I call justice.

Please check your credit report for accuracy. Please don’t ignore letters from creditors and collectors. And especially, please don’t fail to show up in court which causes you to lose, even if you were in the right!

30 New Letters for Credit Repair Businesses and Entrepreneurs

If you are a credit repair business owner or entrepreneur helping others with credit repair (or a non-profit enterprise), this is especially for you.

Available now: 30 letters to help you take your clients’ dispute process to the next level. Available for business and commercial use.

I have personally written each letter to accomplish 8 criteria:

  1. Sounds like it was written by an individual, not by a business.
  2. Wording must be something that a real person would say.
  3. Grammatical structure must not look like it was professionally written.
  4. Must have a non-business closing.
  5. Cannot have the appearance of a template letter.
  6. Voice of the letter must sound genuine and sincere.
  7. Must be short, one page. Representatives are under pressure to process many letters per hour and don’t want to read long letters. A letter that is too long is in danger of being quickly rejected.
  8. Cannot be part of any other template package.

    For more information, including a list of the 30 letters, please see here.

10 Worst Collection Companies For Illegal Debt Collections

Being in debt is bad enough, but when there are greedy companies out there actively violating U.S. federal law, committing fraud in an attempt to get money out of people who are already struggling, well, that is an OUTRAGE!

I expose the 10 worst companies for illegal debt collection practices below, as per complaints received and recorded by the CFPB (Consumer Finance Protection Bureau), a federal agency set up to protect United States citizens.

But first, let me tell you what’s coming soon! In response to the many questions from new credit repair businesses and people who want to start a business, I have created a brand new, unique package of letters for disputes and challenges. The letters that go with the book are copyright protected and are for personal use only. A business would need something different and more unique. I am putting the finishing touches on these super dynamic letters now, and they will soon be released for purchase.

Back to law violators! Look to see if you recognize any of these companies on the Hall of Shame for Debt Collectors:

  1. Encore Capital Group
    The CFPB ordered Encore to pay $42 million to repay customers, plus a $10 million penalty, and to stop collections on $125 million worth of debt.

2. Enhanced Recovery (ERC)

3. Portfolio Recovery Associates

4. Convergent Resources

5. Transworld Systems

6. Diversified Consultants

7. AFNI /Anderson Financial Network (Specialize in working with cell phone and direct TV providers)

8. Citibank, N.A.

9. Resurgent Capital Services

10. Synchrony Financial

Thank you to RewardExpert for compiling this list. You can read their report here.

If you receive a phone call from one of these companies for a past due debt, immediately ask for their contact information (name and mailing address), then ask them to contact you by mail only. DO NOT DEMAND CEASE AND DESIST ALL CONTACT, because that gives them no recourse except to sue you in a court of law. Do not set yourself up for a lawsuit!

There is a lot of bad “info” on the Internet, such as telling people to send a Cease and Desist Letter. Next thing they know, they have been slapped with a lawsuit. Pick up a copy of Repair Your Credit Like the Pros: How credit attorneys and certified consultants legally delete bad credit and restore your good name here for the proper way to handle debts.

Student Loan Late Payments Removed

Did you know? Most student loan companies will remove the late payments on a student loan account after you have established 9 months of paying on time.

This is for federal student loans, not private money student loans, although you can still ask.

When you call to request the deletion of the previous late payments, there is a “magic word” you must say, and it is not please. The magic words are, “I have completed the 9-month rehab program of paying on time.”

9-month rehab is the magic code. Use it even if you were not officially pre-enrolled in a student loan rehab program. If you paid on time for 9 months, then that is good enough.

This is a one-time goodwill gesture for federal student loans. You cannot have late payments, then 9 months of on-time payments, then be late again. You need to show perfect payments after your time of financial hardship that caused the lates.

Ask the loan company to report this to the credit bureaus and to give you a copy (just in case you need to send it to the credit bureaus yourself). Most companies are happy to do this.

You can make the request by letter, but why not save time and postage by placing a phone call?

For more tips and strategies about getting late payments removed, see Repair Your Credit Like the Pros here.

Available on Amazon

Thank you for helping!

Two weeks ago, I pledged to send my royalty income from book sales to help feed people who are literally starving to death due to the draught that destroyed crops and livestock in Ethiopia.. Food from the Ethiopian government goes through Muslim leaders who refused to give any food to Christians unless they denounced their faith.

New Life Ethiopia asked for funds, with the goal of feeding 400 families for one month to get them past this famine.

Thanks you to all who ordered my books in the last two weeks, I was able to donate $500. And thanks to all who donated directly and to all the caring and generous people on New Life Ethiopia’s newsletter who donated, not only were they able to supply food to all 400 families for one month, they were able to supply food for TWO MONTHS!

If you want to read more about the work of New Life Ethiopia, here is a link to a story about an infant who was found lying on the ground, crying in the night.

Abandoned baby was placed in Joyful Place orphanage until he was adopted.

Personally, I believe in giving to my local church, but also giving to worthy causes like New Life Ethiopia. Here in the United States, no one has to starve to death. I cannot save all the starving people, but I can make a difference for someone, and together, our impact is HUGE! Thank you.

Three Credit Repair Success Stories

May I encourage you with a few more success stories from people who have followed the strategies in Repair Your Credit Like the Pros?

G.R. wrote to say their TransUnion score went from the low 600s to 760.
And Equifax went from the low 600s to 740.
Scores were obtained from Vantage Score, which tends to be a little higher than FICO. But what a difference!

G.R.’s late payments were removed using the Credit Investigation Form in the book.
Collections were removed using slightly customized letters from the book and writing “Urgent” in red across the top.

G.R. is still working on a few minor issues.
Well done! Your credit score improvement will save you money in interest, fees, and premiums.

P.J. wrote to say they received a refund of over $400 in fees collected by the credit card company due to their illegal charges. P.J. wrote, “Your book was awesome!!!!!”
Well done, P.J., and thank you for the five exclamation points!

Katia (who gave permission to use her first name) wrote to say she went from 574 credit to 720 credit in 8 months.

The moment I took repairing credit seriously, I began to reap the benefits. ~ Katia

If you, too, are ready to take your credit and your future seriously, do yourself a favor and grab your copy of the life-changing book from Amazon. This current edition gets you ALL the letters; the old version some resellers are peddling does not contain all the current letters and is missing about 5,000 words of information. Please be aware that an author does not get any royalty payment on used, resold books. Thank you for purchasing new.

Emergency! And what I’m doing about it.

Pictures of dust blown fields, failed crops, children so weak from hunger that they can no longer run and play confirm the bad news. The drought in Ethiopia has caused a crisis in food that is beyond anything America has ever experienced.

The Ethiopian government is trying to help, but there are not enough resources for everyone.

City Administrators distributing food in the small villages are Muslim, and they refuse to give anything to the Christian citizens unless they renounce their faith. This Discrimination is an Outrage!

An organization called New Life Ethiopia run by volunteer Americans and a small staff of paid Ethiopians are asking for help to get food to villages. Top priority goes to the children who are severely malnourished.

How can we turn our faces away? How can we not offer a helping hand?

This woman was so weak she could barely move. Zerihun, the Director, gave her two bags of maize. When he checked on her a week later, he was encouraged to find the woman was able to sit in a chair, having been strengthened from the corn cereal.

Together, we can save lives!

I depend on my book sales for my living, but I am donating 100% of my royalty income retroactive from Sunday through the end of this month to help these dear fellow Believers in crisis.

If you ever thought of purchasing a book for friends or family, now is the time when your purchase can save a life.

If you are a realtor or finance professional, grab some books and staple your business card to the cover. People value and keep books, and then your business card will be top of mind when they need your services.

$50 feeds a family for a month. $25 feeds a family for two weeks. New Life Ethiopia’s goal is to provide food for 400 families for a month to get them past this crisis and literally save their lives. We can help!

If the rains do not come, none of us will survive without help, explained a father.

If you would like to donate directly to New Life Ethiopia, more information and the donation link is HERE.

If you would like to pick up some books, knowing 100% of my personal royalty income goes to this cause, you can do so HERE and HERE.

Thank you from the bottom of my heart, and God bless you!