On behalf of Charles Covey
Although federal law prohibits abusive collection tactics, its protection is limited.
If you have fallen behind on your bills, you are probably already familiar with the unpleasant and annoying phone calls from creditors that people in your situation often receive. If you owe the debt, you may feel like you “deserve” the disagreeable creditor harassment techniques that some creditors resort to. However, in reality, if a creditor crosses a line, you do not have to put up with it.
Under the Fair Debt Collections Practices Act (FDCPA), federal law provides protection against your creditors using a variety of misleading or abusive collection tactics such as:
• Calling you an unreasonable number of times
• Calling you at inconvenient hours, such as before 8 a.m. or after 9 p.m.
• Speaking with your employer or other third parties about your debt, if you have asked them to stop.
• Using threats of violence or jail time, abusive language, or profanity.
• Threatening lawsuits when there is no intention of doing so.
• Making misstatements about the amount, legal status or character of your debt.
Under the FDCPA, creditors that violate its provisions can face serious penalties. The act allows you to file a lawsuit against the offending creditor and collect any losses that you have suffered as a result of the illegal act. Even if you have no losses, you are entitled to collect up to $1,000 per violation, plus attorneys’ fees and court costs, which makes it much easier to assert your rights if you are in a financially difficult position.
Bankruptcy: a permanent solution
The protections the FDCPA provides are powerful. However, it does not protect you against the eventual collection of a valid debt, provided it is done legally. As a result, your creditor may eventually file a lawsuit against you, garnish your wages or use other legal means to collect the debt. Therefore, if you are unable to pay these valid debts, it is worth considering availing yourself of the protection that bankruptcy offers.
As soon as you file bankruptcy, the automatic stay prohibits creditors from calling you or taking any other actions to collect your debts (e.g. lawsuits, foreclosures or garnishments). During bankruptcy, your debts are quickly eliminated (Chapter 7) or paid back over three to five years (Chapter 13). Once you have completed the process, most of your pre-bankruptcy debts have been either wiped away or paid back, allowing you a new start. At this point, your creditors are legally prohibited from calling you about or attempting to collect pre-bankruptcy debts.
If you are the victim of creditor harassment and would like to learn more about your legal remedies, both inside and outside of bankruptcy, it is wise to speak to an experienced bankruptcy attorney. An attorney can assess your situation and recommend the best course of action.