In many circumstances, the consumer has rights against the collector which might avoid the need for bankruptcy relief. One weapon is the Fair Debt Collection Practices Act or FDCPA.
The FDCPA prohibits contracts from third parties if the collector knows the debtor is represented by a bankruptcy attorney, otherwise contact with third parties is permitted but only to locate the debtor. In practice, writing is required in advising of bankruptcy attorney representation to avoid he said she said dispute.
The collector must inform the debtor in every communication that the communication is from a debt collector. The collector must send the consumer dispute verification invitation within five days of initial contact, and the collector must suspend collection until the debt is verified if the dispute is received within 30 days.
A debt collector may not harass, oppress, or abuse a consumer, but this is not defined and is left up to the courts. The collector may not publish a list of nonpayer’s, except to credit bureaus, or use obscene or profane language, or make repeated telephone calls for annoyance purposes. Debt collectors may not use false or misleading means to collect a debt, and may not collect more than what is justly owed. Actual damages, $1000 statutory penalties, and attorney fees may be recovered. After filing personal bankruptcy, and the automatic stay is in place, it's taboo for collectors to call you at all.
From your bankruptcy attorney’s point of view, a tape recording of an abusive call is best. Second best is a detailed narrative of what took place and how you felt. Be aware that it is very difficult to convince a judge or jury that you are in the right, so the more proof you have the better.
The easiest and often most effective action you can take is to simply ask the creditor to stop calling you. You may have to remind the caller that the firm has violated one or more of the provisions of the Fair Debt Collection Act, but the calls should cease. Should you be dealing with a collection agency and not your original creditor, you may also create and send your own cease and desist letter stop their debt collection harassment. Always send a cease and desist letter by certified mail, return receipt requested so you'll have proof of its receipt. Also, make every attempt to send this letter to a physical address of the collection company, not to a P.O. Box. You can report harassment problems to your state Attorney General's office, the Federal Trade Commission, the American Collectors Association or your local State Bar Association. Should problems persist, you have the right to sue a collector in either state or federal court within one year from the date of the violation. If you are successful you are eligible to recover money for damages, court and bankruptcy attorney costs plus an additional amount of up to $1000. If you have no way out to catch up you will probably have to file chapter 7. The beauty of this is, once you file chapter 7 bankruptcy, all of the calls will stop.
The Fair Debt Collection Act specifies the rights of both creditors and debtors. If you have been subjected to any of the actions noted, you are the victim of creditor harassment for the FDCA regulations. Collectors are prohibited from calling before 8 AM and after 9 PM or even constantly using the phone to harass you. Next, they can't deposit a post dated check prematurely. Another very common complaint is that creditors cannot use profane language. Something else they have been known to do is give false information of any type concerning your account to someone else. Once you file for bankruptcy in the automatic stay is in place that creditors will be notified and they can't even contact you at all. This is probably the largest benefit of filing personal bankruptcy besides wiping your debts clean.
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