If a debt collector contacts you about a debt that you cannot pay, you can send a “cease letter” that tells the debt collector not to contact you anymore. In the letter explain that your income is “exempt from debt collection”. You can use this sample cease letter.
If you notify the original creditor that your income or property is exempt, they may also stop collection actions against you. Write to the original creditor and explain your situation.
- Describe the source of your income clearly.
- Include the citations to the specific law which protects you. These citations are listed in How can I stop creditors from taking my money and things? You can use these citations to look up the law in your local public library or the law library. (M.G.L. stands for Massachusetts General Laws; U.S.C. stands for United States Code).
- You can also include in your letter any information that makes your case more sympathetic – like disability, advanced age, dependent children, or extreme poverty.
Your letter should make it clear to a creditor that you have no money he or she can reach. You are an “execution proof debtor”. Often creditors will not bother trying to collect from execution proof debtors.
Even though your income and property cannot be reached, the creditor may sue you for the money anyway. If the creditor takes you to court, tell the judge and the creditor that you are “execution proof.” If the creditor wins the collection case against you, they may try to take your income.
If your income is protected:
- keep it in a bank account separate from all your income that is not protected. This helps to make clear that the creditor cannot take the protected money.
- It also helps to have the checks of only the exempt income directly deposited into the account so that you have proof that the account holds only protected income.
- Write a letter to the bank. Tell them that your account holds only protected income. If you have already written to them, the bank should not freeze the account if your creditor gets a judgment against you. You can use this sample letter to a bank regarding exempt account.
- You can also ask Social Security to pay you on a DirectExpress debit card.
Mariah Jennings-Rampsi, South Coastal Counties Legal Services, with funding from American College of Bankruptcy Foundation