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Dear Gary,
My husband and I have one credit card debt to the tune of about $3500. I cancelled the account so we can't charge any more.

We have been making payments of $100 every month which is well below the minimum that the credit card company requests. They call nearly every day hounding us for the rest of our minimum payment which has reached in the neighborhood of $800 a month.

Although we are not paying what they request every month, we ARE making a payment. Is there any way we can stop the phone calls? Are we breaking the law by not paying the entire minimum payment? We do plan on making a large payment when we can, but with three kids and one income, $800 is hard to come by.
--Lisa B.

Sounds like Lisa is in a tough place. She's really asked three separate questions. What can she do to stop the collection calls? Is falling behind illegal? And what's the best way to get out of this situation?

According to the American Bankers Association there's over $600 billion in bank card and revolving credit outstanding. And a little more than 3% of the bank card accounts are delinquent. That's about $18 billion owed on past due accounts. So Lisa's got a lot of company.

Let's begin with the harassing phone calls. The Fair Debt Collection Practices Act (FDCPA) is designed to protect consumers from abusive, deceptive and unfair treatment by debt collectors.

The law gives debtors certain rights. For instance, if you don't think that you owe the money, you have the right to dispute the debt. You must respond in writing and do it within 30 days of receiving the letter from the debt collector.

The phone calls can be stopped. Just send a letter to the collection agency telling them to stop contacting you. Once notified the collector can then only call or write to inform you of action that they intend to take (i.e. legal suit) or tell you that they intend to stop trying to collect the debt.

She is allowed to hang up on a debt collector. No law says that you have to speak with them. Nor do you have to give them your phone number if they ask.

Debt collectors are not allowed to call you at work. They're limited to calling between 8am and 9pm. They can't make threats or tell others about your situation.

Any complaints about collection practices should be directed to your state attorney general or local consumer protection agency. You may also choose to send a copy of your complaint to the FTC at: The Federal Trade Commission, Washington, DC 20580.

Lisa should not negotiate with debt collectors by phone or in person. All communication should be written. Respond to all of their requests by mail. Use registered mail so you have proof that it was received. By keeping copies of all correspondence she'll have a precise record of what has happened.

It appears that Lisa missed a very important step. When you're about to fall behind you need to contact creditors immediately. Explain the situation and your willingness to repay debts. They're more willing to listen if you call before the bills become past due. They may customize a repayment plan that you can afford. Remember, their goal is to collect the money borrowed plus interest. If you propose a plan that will get them paid back you've helped them achieve that goal.

Now for the second question. Yes, Lisa is breaking the law. She won't be taken away in handcuffs. But she has made a contract with her credit card company. Now she's not living up to that contract. Those charge slips commit us to the payment plan of the card company. If the situation goes on long enough, the creditor could force Lisa into bankruptcy.

Already, the delinquency is reflected in Lisa's credit history. That will make it more expensive for them to borrow money in the future.

Finally, what can Lisa do to get out of debt? First, she needs to use a budget. Then she needs to raise extra money and be prepared to cut all unnecessary expenses.

This is a good time to consider any way that Lisa might have to raise funds. Consider a part-time job. If they own their residence, a home equity loan might be a way to make the debt more manageable.

Unnecessary expenses need to be slashed. And "unnecessary" should be defined as anything that's not absolutely essential to surviving until the crisis is passed. For, indeed, this is a financial crisis.

Lisa's $100 per month isn't enough to get the debt paid off. At 22% annual interest (and it could well be higher) it would take her 6 years to pay off the debt.

But it might take longer. According to Bankrate.com all of the ten largest card issuers have increased their late fees within the last two years with $29 being the most commonly charged fee. Paying less than the minimum can also trigger fees. If she's incurring a fee of $25 per month, it will take her closer to 9 years to pay off the debt.

If they really can't raise money or cut expenses, Lisa might want to consider contacting a non-profit credit counseling agency. There are a number of good ones available. It will be a black mark on their credit history. But, it's better than falling even further behind and heading towards bankruptcy.

Lisa is definitely in a bind. Debt is a cruel master. Card issuers really don't care how hard it is to make the payments. They live in a "bottom line" world. Either they collect the money owed or they have to write it off as a loss. And no one likes losses.

Hopefully Lisa will be able to find an extra $100 each month that can be applied to repayment. That could be enough to begin to resolve this crisis and start the recovery process.