Can a Bankruptcy Case Stop Creditor Harassment?

Facing a debt problem can be stressful and frustrating. Some individuals may experience anxiety and depression. When a person suffers a considerable amount of stress for long periods, health problems can develop. While creditors may make repeated attempts to collect the debt, harassment is illegal. Federal laws protect individuals from creditor harassment.

If creditors are harassing you, you may have several options to stop creditor harassment. One option might be filing for bankruptcy relief. Filing bankruptcy stops creditor harassment and resolves the debt problem that led to harassment.

Schedule a free consultation with an experienced bankruptcy attorney. You can learn more about your legal rights regarding creditor harassment and how filing a Chapter 7 or Chapter 13 bankruptcy case can eliminate your debt problems.

Consumer Protection Laws Prohibiting Creditor Harassment

State laws limiting the actions creditors take to collect a debt vary by state. However, consumers are protected by the Fair Debt Collection Practices Act (FDCPA) regardless of which state they call home. The FDCPA contains numerous limitations on acts that debt collectors can take when collecting debts. However, the law applies to debt collectors, not to the original creditor. Therefore, if an original creditor commits any of these actions when collecting a debt, the action may not be considered a violation of the FDCPA.

Examples of actions that a debt collector is prohibited from taking under the FDCPA include:

  • Debt collectors should not call you before 8:00 a.m. or after 9:00 p.m.
  • If you notify a debt collector you cannot receive calls at work from the debt collector, the debt collector is not allowed to call you at work.
  • When you tell a debt collector you are represented by an attorney regarding the debt, the debt collector should stop calling you and contact your attorney. Therefore, you should tell a debt collector if you retain an attorney to call the attorney instead of calling you.
  • If you inform the debt collector in writing to stop contacting you, the debt collector can only contact you to tell you that it will no longer contact you or to tell you that it may take legal action, such as filing a lawsuit, to collect the debt.
  • Harassment is prohibited. Examples of harassment include using profane language, repeatedly calling a person with the intent to annoy or abuse; threats of violence; and, publishing lists of people who have not paid a debt.
  • Debt collectors cannot make threats of actions the debt collector cannot legally take or has no intention of taking.
  • Misrepresenting themselves as attorneys, court personnel, or law enforcement officers is prohibited.
  • IThe FDCPA also requires debt collectors to take certain actions. If you request information about the debt, the debt collector must provide you with the name of the creditor and how much you owe. In addition, if you request the name of the original creditor, the debt collector must provide that information also. The debt collector must also inform you that you have the right to dispute the debt. If you dispute the debt, the debt collector must provide verification of the debt within 30 days or cease collection efforts.

    For more information about debt collection, you can visit the website for the Consumer Financial Protection Bureau (CFPB).

    What Can I Do If a Creditor is Harassing Me?

    The FDCPA does not cover the original creditor or business debts. Therefore, you need to verify the type of debt and that the company or person is a debt collector. You can write a letter telling the debt collector not to contact you. However, this does not settle the debt. The debt collector could file a debt collection lawsuit or take other legal action to collect the debt.

    You may also file a lawsuit against the debt collector alleging violations of the FDCPA or other fair debt collection laws. Unfortunately, lawsuits could take a long time to litigate and may not result in any compensation paid to you.

    Filing for Bankruptcy Relief to Stop Creditor Harassment

    To resolve the problem of creditor harassment and the underlying debt, you may want to consider filing for bankruptcy relief. The bankruptcy stay prevents all creditors from contacting you to collect a debt. Once your case is filed, creditors are to cease all debt collection efforts unless they obtain permission from the bankruptcy court.

    The bankruptcy stay stops wage garnishments, foreclosures, repossessions, creditor letters, and telephone calls from creditors. You may need to notify creditors that you filed a bankruptcy case if they have not received the notice from the court, but once a creditor receives notice, the creditor must contact your attorney.

    Stopping Creditor Harassment Permanently

    The most important thing to remember is that the bankruptcy filing stops creditor harassment permanently for these creditors by getting rid of the debt. When a debt is discharged in a Chapter 7 or Chapter 13 case, the creditor, including debt collectors, is prohibited from taking any action in the future to collect the debt. The discharge eliminates your legal liability for the debt. Therefore, the creditor cannot do anything to collect the debt.

    If a creditor violates the bankruptcy discharge, that creditor could face severe penalties from the bankruptcy court. Once a creditor is informed the debt was discharged in a bankruptcy case, most creditors understand they must cease all actions related to the debt.

    Should I File for Bankruptcy Relief?

    It can be difficult to know whether or not you need to file a Chapter 7 or Chapter 13 bankruptcy case until you meet with an experienced bankruptcy lawyer. You could have several options for resolving your debt problems, including filing a bankruptcy case.

    TA bankruptcy lawyer reviews all your options during a free consultation so that you can make an informed decision whether or not bankruptcy is your best option for getting out of debt.

    Filing bankruptcy can get rid of:

  • Medical debts
  • Credit card debt
  • Past due rent and utilities
  • Payday Advance loans
  • Most personal loans
  • Some income tax debt
  • To discuss your case, schedule your no-cost, no-obligation case review with a bankruptcy attorney.