As bankruptcy attorneys, we hear lots of stories about how our clients accumulated debt; how they wish to get of debt; and what it is like to live with debt hanging over their heads. One of the most common reasons that our clients wish to file bankruptcy is because they are tired of “robbing Peter to pay Paul,” and they are tired of being hounded by their creditors. We hear many stories of some really horrible debt collectors who make our clients’ lives, undeniably stressful. I just had a client the other day call and say that a debt collector was threatening to haul the client to jail for not paying a bill. I have had other clients say that debt collectors will call and speak to their children and give the kids similar threats about jail. Now, I know not all creditors, creditors’ attorneys, and debt collectors are like this, but any such call would put a lot of unnecessary stress on anyone.
So, what can be done about these calls? Well, filing for bankruptcy will definitely take care of the debt collector bullies. Once a bankruptcy is filed, a debtor is protected by the automatic stay of bankruptcy protection (11 U.S.C. Sec. 362). This stops, or stays, all creditor collection actions, including phone calls, letters, garnishments, pending lawsuits, foreclosures, and repossessions. Bankruptcy, then, is the ultimate knock-out punch to your creditors. Prior to filing bankruptcy, however, an individual is not protected by the automatic stay. This is an issue for many of our clients who need time to pay attorneys’ fees and file their bankruptcy. This is where I point clients to the Fair Debt Collection Practices Act. The Act defines collection practices that are illegal under the Act and provides remedies for consumers. Importantly, for our potential clients, the Act does state that once a consumer has hired an attorney to represent him/her and communicates this to a debt collector, the debt collector cannot communicate directly with the consumer. Therefore, we tell our clients to notify every collector that calls or writes them, that, although they have not filed bankruptcy yet, they have retained an attorney and to provide our contact information. Some collectors will still deny that they are no longer able to contact the consumer. This is where the consumer must be just a pushy as the collector and inform him/her of the Act.
Some other important provisions of the Act include:
- No contact may be made by a creditor at an unreasonable time, particularly between the hours of 8:00pm and 9:00am.
- No contact may be made at a consumer’s place of employment if the debt collector knows that such communication is prohibited by the employer. Here it is important for your employer to communicate this with the debt collector directly.
- A debt collector cannot impersonate or present false information suggesting that they work for the government or some policing agency. I have actually spoken to a collector that made representations that he worked for the FBI.
- Collectors cannot engage in harassing behavior, which includes threatening violence or criminal liability (if there is none) and causing the telephone to ring repeatedly with the intent to annoy. The collector’s intent is important here, so documenting your conversations and your statements made that you wish the behavior to stop is integral to proving that the collector violated the Act.
If a collector has violated the Act, than you may have the right to pursue them civilly for damages and fines. Regardless of whether you want to fight the collector through the legal process, file bankruptcy, or both, it is important to remember that much of what a creditor, or collector, tells you is not true and is intended to create stress so that you will feel pressured into paying. This behavior is wrong, and you should stand up to these bullies.