Debt collectors expect you to play by their rules, but sometimes, people use the rules against them.

So, what would you do if a debt collection agency hounded you nonstop, demanding money you barely had? Would you cave under the pressure? Or would you find a way to legally outmaneuver them and turn the tables in your favor?

In the following story, one person finds themselves in this exact situation and gets the debt canceled. Here’s how they did it.

Malicious Debt Compliance

Before I start, please be aware that this happened in Australia many years ago. The rules may be different where you live, especially in the US and for larger debts.

Anyway, I was in my early 20s, working my first real job, and I was offered an AMEX. Later, unemployed, I maxed it out to $2K pretty quickly.

Since the interest was now a big chunk of the money I was getting from Social Security, I often missed payments, and when I did pay, it barely changed the balance. Eventually, a debt collection service got involved and hassled me for money almost daily.

He defeated the company, and they canceled the debt.

I was talking to a friend who worked for a loan company and he told me under finance laws you are legally paying a debt as long as you are making regular payments of a minimum amount – which at the time was about $5/week.

So, I set up a recurring direct debit of $5 and told the collection agency in writing that was the maximum I could afford (it wasn’t).

They made threats, but I stuck to my guns. Sure enough, after a few weeks of this, they sent me a letter canceling the entire debt with no default recorded. It’s not a default if they terminate the debt, only if you stop paying.

Obviously, it was costing them more in debt collection and management fees than I was giving them, and at the rate I was paying, it would have gone on for years.

Wow! That was sure lucky.

Let’s take a look at what the people over at Reddit have to say about this story.

This person learned the laws.

Great point.

Apparently, the “good faith” effort is real.

This could be true.

That worked well!

Although it’s never good to borrow money you don’t repay, it’s good that this person got themselves out of debt.

If you liked that post, check out this post about a woman who tracked down a contractor who tried to vanish without a trace.