When you fall behind on your bills, calls from debt collection agencies soon follow. Most people don’t fall behind on their bills voluntarily. Such situations are often due to unforeseeable circumstances such as a death in the family, an accident that prevents you from working, a divorce, or a layoff from work. Calls from debt collectors are stressful, especially when more than one debt collection agency calls on a regular basis. How can you stop creditor harassment? Know the rules.
Understanding the debt collection process
Creditors usually don’t send your delinquent account to a debt collection agency until it’s at least 60 days past due, but not all debt collection processes or agencies operate the same way. Some debt collection agencies specialize in delinquent mortgages, credit card debt, or auto debt, but all must work within the statute of limitations for collection of those debts, which varies by state.
Debt collection typically starts with letters, followed by phone calls. Some agencies work with private investigators who can legally search for a debtor’s assets, which can include banking and other financial account information to determine if you can repay the debt owed. A debt collection agency might threaten to report delinquent debts to credit bureaus as a means to “encourage” the consumer to pay the debt or otherwise face damage to credit score ratings.
Debt collectors cannot take money from bank accounts, seize paychecks, or utilize other methods of collection unless a court has ordered a debtor to repay a portion of their debt to one or more creditors. This must be done before the statute of limitations runs out. In cases where the debtor refuses to pay, a judgment might allow a debt collection agency to take added steps to retrieve the debt owed.
Unfortunately, debt collection agencies have a bad reputation even though the Fair Debt Collection Practices Act (FDCPA) places limitations on collection agency methods. When this doesn’t work, can you stop creditors from harassing you?
What can you do to stop creditor harassment?
One option to avoid creditor harassment is to discuss your options to repay past-due debt with a bankruptcy lawyer. This is not an easy decision. Reducing accumulated debt with no way to pay those bills seems impossible, yet receiving multiple calls from debt collectors on a daily basis is extremely frustrating. You might be threatened with home foreclosure or repossession of your property. In order to end the harassing calls, you might consider filing for bankruptcy, but such decisions must not be made on the spur of the moment.
Filing for bankruptcy is difficult, but it does provide some benefits such as freezing foreclosures and repossessions (known as a stay order). Once a bankruptcy is filed, the automatic stay goes into effect. After that, all creditors are prevented from:
- Home foreclosures
- Calling or otherwise contacting you through letters, emails, or other forms of communication
- Filing or continuing to file a lawsuit
- Repossessing collateral or property
- Garnishing wages
- Know your rights. Educate yourself about legalities of what a debt collector is and isn’t allowed to do. For example, the FDCPA is applicable to family, personal, and household debts. The act does not protect business debts.
- Be aware of the statute of limitations on debt collection in your state.
- Schedule a consultation with an attorney. Bankruptcy attorneys know which types of debt fall under the Fair Debt Collection Practices Act. They know how to approach creditors attempting to collect on debt.
Filing for bankruptcy can stop creditors from harassing you, but it’s not always the best option. Consult with a bankruptcy attorney in order to determine whether you qualify for bankruptcy filing. Also be aware that not all debt is wiped out with a bankruptcy filing. For more information on how bankruptcy can stop harassing phone calls from debt collectors, contact our office today at 817-335-4003 for a free consultation.