Put a stop to harassment by debt collectors
Image Source: Flickr User Kirsty Hall
One of the best things about filing Chapter 7 or Chapter 13 bankruptcy is the immediate end to debt collection efforts. From the moment your attorney files your papers, there is a 90-day automatic stay in most cases. What this means is that for three months from the date you file, creditors cannot – by law – contact you about your debts. And after your discharge, creditors can’t hassle you ever again about discharged debts. But some debt collectors break the law – and you should hit back. Not only can you put an end to the harassment, but you may end up with money in your pocket.
How creditors try to skirt the law
From the moment your case is filed, debt collections on included debts must stop. However, it may be a couple of weeks before your creditors are notified. You should leave your attorney’s office with a copy of your bankruptcy petition that includes your case number assigned when it was filed electronically. So when your phone rings and the call is from a debt collector, you don’t have to stress. You can answer the call and tell them the collector:
- I filed bankruptcy.
- Here is my case number.
- Here is my attorney’s name and number.
Most debt collectors and creditors will stop in their tracks when they hear “bankruptcy”, and you won’t hear from them again. However, if the debt collector is nasty or says they’ll be calling back, ask for their name, company name and phone number. In most cases, that will scare them into hanging up and not calling back. But once the notices are sent out, all debt collection efforts on affected debts should end.
Some debt collectors, though, will continue to send threatening notices, but you may notice - at the bottom of the letter in fine print - it may say something like “if you have filed for bankruptcy protection, this letter is not an attempt to collect a debt.” But most of these letters start out with the notice that it’s a debt collection letter. Those two seem at odds, right?
If you keep getting these letters, save them and take them to your attorney. During the bankruptcy process, which is about four months start to finish for Chapter 7 and several years for Chapter 13, the bankruptcy judge can hit the debt collectors with a punitive fine for harassing you in contradiction with bankruptcy law. Punitive means it’s a punishment, and the judge can pick any dollar amount they want.
Even after bankruptcy discharge, you’re still protected
After you get your discharge, if you get calls or letters from debt collectors trying to collect a debt discharged in your bankruptcy, you don’t have to put up with it. The Fair Debt Collection Practices Act sets a $1,000 per infraction fine – plus attorney fees in most cases. Log the phone calls, gather information on who is calling, the name of the debt collection firm or creditor, and record a call if possible. Save any letters as well. Take all of this back to your bankruptcy attorney so they can file an FDCPA violation claim.
At the end of the day, it’s not so much about putting cash in your pocket as it is about slapping down debt collectors who have no respect for the law. If the slap comes while your bankruptcy is still in court and not yet completed, the slap can be even harder. It’s important that consumers not allow debt collectors and creditors violate the law, harass them, and act in unscrupulous ways. If they’re not punished, they have no reason to stop.
But if aggressive debt collectors are hit with fine after fine, they will have a financial motivation to behave better, even if compliance with the law doesn’t matter to them. Don’t let debt collectors get away with abuse. Even if you’re not in bankruptcy, there are still Federal guidelines for debt collection and laws to protect consumers from abuse. If you’re being harassed by a debt collector, report them to the Federal Trade Commission (FTC) or, better yet, to the Consumer Financial Protection Bureau (CFPB) – an agency empowered to take on creditors operating outside the law.
To find out how bankruptcy can help you get out of debt for good and end harassment by debt collectors, contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 for a free consultation in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.