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Can Filing Bankruptcy Stop Credit Harassment?

On Behalf of | Feb 1, 2020 | Bankruptcy

Can Filing Bankruptcy Stop Credit Harassment?

When you are unable to pay your debts, you may feel as if you are a bad person and the situation is all your fault. The truth is that most people who are in debt and cannot pay their bills have experienced a financial hardship such as the loss of a job, an unexpected illness or injury, or the loss of a spouse. Creditors don’t care what is going on in your life — they only care about getting paid. Unfortunately, some creditors cross the line when trying to collect a debt.

What Is Creditor Harassment?

Consumers are protected from certain actions by creditors to collect a debt. Congress enacted the Fair Debt Collection Practices Act (FDCPA) to prevent creditors from taking certain actions that cross the line into harassment. The FDCPA limits the actions that debt collectors can take when pursuing a consumer for payment of debt. Examples of protections contained within the FDCPA include:

• Protection From Harassment – The Act protects consumers from being abused and harassed by debt collectors. Debt collections cannot use threats or obscene language to frighten someone. They are also prevented from using the telephone to call a person repeatedly to harass or annoy that person.
• Protection From False Statements – Debt collectors cannot lie to a person to collect a debt. For example, a debt collector cannot tell you that if you do not pay a bill, you will go to jail for a crime. The debt collector cannot tell you that he is working for a government agency or attorney unless that is true. Furthermore, a debt collector cannot tell you that the forms he sent to you are legal documents if the documents are not considered legal documents.
• Protection From Calling At All Hours – Debt collectors can only contact you during normal business hours. For the purpose of debt collection, normal business hours are between 8 a.m. and 9 p.m.
• Protection From Being Harassed At Work – The FDCPA provides protection from being harassed by a debt collector while you are at work. The debt collection is prohibited from contacting you at work if he is informed that you cannot receive calls at your place of employment.
• Protection Against False Information – Debt collectors cannot give false information about you to a credit reporting agency or any other person or company. They cannot send you documents that are designed to look like the document is from a government agency. Likewise, the debt collector cannot tell you that a lawsuit has been filed or the debtor collector is about to garnish your wages or seize your property unless it is true.

For more protections for consumers, you can visit the Federal Trade Commission’s website.

Does the FDCPA Include All Creditors?

No, the FDCPA does not protect you against harassment by all creditors. The FDCPA only applies to debt collectors. Debt collectors are third party individuals or companies that pursue debts on behalf of the original creditor or purchase original debts to collect. The FDCPA does not apply to the original creditor. Therefore, the original credit can continue to send you letters and call you every day to try to collect the debt. Creditors are prohibited from taking some actions to collect a debt; however, they are not bound by the same strict rules that debt collectors must follow.

How Can I Stop Creditor Harassment?

You can send a letter to the debt collector stating that you do not want any further contact from them. If the debt collector continues to harass you, you can also file a report with the Federal Trade Commission. In some cases, a consumer can file a lawsuit against the debt collector for violating the FDCPA. Unfortunately, nothing may ever come of your complaint and filing a lawsuit can be a time-consuming and expensive undertaking.

One way to stop creditor harassment is to file a bankruptcy case. Filing for bankruptcy relief immediately stops creditor harassment. When you file a Chapter 7 or a Chapter 13 bankruptcy case, an automatic stay goes into effect immediately. The automatic stay prohibits all creditors (even the original creditor) from taking any action to collect a debt, including telephone calls, collection letters, wage garnishment, repossession, foreclosure, and lawsuits.

In addition to stopping credit harassment, filing a bankruptcy case gets rid of the debt that is causing you to be harassed. A bankruptcy case can give you a fresh start, free from overwhelming debt so that you can build a stronger financial future for yourself and your family.