One of the most challenging parts of debt is creditors. These entities are often less than sympathetic to financial woes and frequently use invasive methods to collect. Keep reading for more information about creditor harassment and how bankruptcy can help.
What Is Creditor Harassment?
According to the Federal Trade Commission, debt collector harassment or creditor harassment is when a collector or collection agency violates privacy and/or uses abusive, unfair, or deceptive practices to collect a debt.
Creditors aren’t bad overall, but some use collection methods that can take a toll on your mental and emotional health. Unless you are extremely behind on payments or have evaded legal collection methods, it’s unlikely that you’ll be subject to an angry creditor or harassment. Some lenders handle issues with dignity, and others resort to underhanded collection practices.
What Creditors Can and Cannot Do
- Creditors CAN collect debt on credit cards, car loans, mortgages, student loans, and other household debts.
- Creditors CAN call you, send letters and notices, email you, or send text reminders about debt.
- Creditors CAN share information about your debt but only with your attorney should you have one.
- Creditors CANNOT contact you at unreasonable hours and are generally guilty of harassment if they contact you before 8:00 am or after 9:00 pm.
- Creditors CANNOT tell friends, coworkers, or bosses about your debt.
- Creditors CANNOT lie about the amount you owe or pretend to be a government agent or attorney.
- Creditors CANNOT threaten to hurt you or your family or use obscene language to intimidate you.
- Creditors CANNOT collect interest fees or surcharges unless the loan contract is said to do so.
- Creditors CANNOT cash post-dated checks early.
If a creditor uses any of the illegal methods above to collect your debt, you can report them to the Federal Trade Commission, Consumer Financial Protection Bureau, or your state attorney general. You may also take legal action.
Old debt, also known as time-barred debt, is outside of the statute of limitations. In these cases, the creditor waited too long to sue you and collect the money. Once the statute of limitations is passed, the lender cannot legally file a lawsuit or collect the debt now that it is time-barred.
The statute of limitations varies from state to state, so it’s important to research the rules in your state.
Can Bankruptcy Help?
If you’re experiencing creditor harassment and struggling with debts you can’t pay back, bankruptcy can help.
There are two main types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7, also called liquidation, will discharge unsecured debt while liquidating some assets to pay off some of what you owe. Chapter 13 allows you to reorganize your debts in a repayment plan that lasts three to five years.
Filing for either Chapter 7 or Chapter13 will result in an automatic stay, which prohibits all creditors from attempting to collect what you owe. Bankruptcy also falls under federal law, so any collection efforts after you file could be punished locally or by a federal bankruptcy court.
Bankruptcy is a debt relief option that can help you recover financially and get back on your feet without worrying about creditor harassment.
Start Your Financial Recovery Today!
Bankruptcy is sometimes considered a bad thing, but the truth is, bankruptcy helps to provide financial security and peace of mind. If you are wondering if bankruptcy is right for you or plan on filing, contact our attorney.
Schedule your consultation with the Law Office of Seni Popat, P.C. today!