A friend of mine, a responsible sort who had always paid his bills on time, recently fell on hard times. The corporation that had benefited from the diligence and devotion with which he customarily performed his duties day in and day out for 10 years laid off hundreds of employees, and my friend well call him X found himself downsized.

X had a son and daughter attending UCLA, and the combined income of X and his wife was what had kept the family solvent. With only his wifes income keeping the family afloat, they were forced to delve into their savings. X, a JPL physicist, had no idea that his shining credentials would actually work against him in the job market. Time and time again he was told that he was overqualified. Weeks stretched into months, and before he knew it, the savings and the nest egg were exhausted. He was still unemployed.

Humiliated, X nevertheless called his creditors and explained his situation, expressing his desire to defer payments on his monthly bills until he was back on his feet. For a few creditors he was able to send a nominal monthly fee, but there were some bills he simply could not pay. Many of the creditors he contacted were not sympathetic to Xs plight. He began to receive calls from collection agencies.

He received calls off and on throughout the day. He tried explaining his situation, but the collection agency representatives had a single item on their agenda: to get X to pay his bills. X told me that the attitude of his callers ran the gamut: cajoling, patronizing, harsh, mean-spirited. Some of the callers probably crossed the line into harassment. His stress level rose exponentially. He might have sought consumer credit counseling services were it not for the fact that paying for such services was simply not an option.

What did you do?" I asked him.

Nothing. I figured Id have a pretty hard time proving that a callers tone was abusive. It wasnt what they said. It was the way they said it. I tried explaining that I was an upright citizen who had always been responsible when it came to paying my bills. That went in one ear and out the other."

I told Xs story because there are those who think people with less than perfect credit histories are irresponsible, are somehow trying to scam their way out of paying bills, or are financially challenged individuals who couldnt balance a check book. Sure, there are some people with tainted credit histories who fall into this category. But often circumstances we have no control over wash over us, and we may quite unexpectedly find ourselves in dire and desperate straights. X was one such person.

What X didnt know what a lot of people dont know is that theres something called The Fair Debt Collection Practices Act. This is a federal law that was instituted to protect consumers from collection agencies and bill collectors who, in their zealousness, break the law and cross the line into harassment.

Three Words That Will Stop Calls From Collection Agencies

X didn't really need to pay for consumer credit counseling. All he needed to do was write a short letter that can be summed up in three words: Cease and desist. Actually, youll fluff the letter up a little, as follows:

"Please be advised that this letter is your notification, under provision of public laws known as the Fair Debt Collection Practices Act (public laws 95-109 and 99-361) that your services are no longer required. I will not acknowledge or respond to any collection agency and am exercising my right to communicate only with the original creditor (name the creditor) therefore, your organization must immediately DESIST and CEASE all efforts to collect this debt."

Feel free to use any portion, or all, of the letter above. When I told my friend how simple it was to get collection agencies off your back, he couldnt believe it. If only Id known," he said sadly, shaking his head.

The reason I know about this is because I fell on financial hard times myself and learned the answers the hard way. In effect, I became my own consumer credit counseling service, learning everything I could about bad credit, how to improve and repair it, credit reports, bankruptcy, FICO scores, and even segregated credit files. My story is similar to Xs, which I present in all its gory, gaudy detail on my blog.

If I learned anything from my own unhappy experience, its that just because you find yourself in a precarious financial situation, youre not powerless. The Fair Debt Collection Practices Act gives you the ability to protect yourself from abuse, harassment, and humiliation at the hands of collection agencies.