Beware of Illegal Collections To Avoid Filing Personal Bankruptcy
Personal Bankruptcy – Know Your Rights
Many individuals who wish to file personal bankruptcy are forced into that situation because of the debt they owe. Their situations may not always be their fault though. Many collection agencies use illegal collection acts to coerce debtors into paying debt they should not have to pay.
Illegal Collection May Force You To File Personal Bankruptcy
The Fair Debt Collection Practices Act, or FDCPA, is a law designed by the federal government that states how collection agencies can and can not operate. A collection agency refers to a third party agency whose purpose is to collect a debt from a consumer. Original collectors, such as hospitals, may sell a consumer’s debt to a third party collection agency or hire the agency to collect the debt. The original collectors are not restricted by the FDCPA laws, however, the third party agency is.
Some of the actions taken by collection agencies are in direct violation of the FDCPA. They are used to scare, harass, embarrass, or mislead an individual into paying their debt. If you know your rights and can recognize them, you may save yourself from having to file personal bankruptcy.
- Harassment- According the FDCPA, collection agencies are not allowed to call you at inconvenient times. They can also only call you one time at work. If you tell them not to call you at work anymore, they must refrain from making another phone call. They must also avoid excessive calling.
- Embarrassment- According to federal laws, debt collectors may not embarrass you in an effort to make you pay your debt. They may call your friends, family members, or old neighbors in an effort to locate you, but they may not tell them they are attempting to collect a debt. They also are not allowed to send you envelopes or post cards stating the mail is from a collection agency or insinuating the amount of money you owe.
- Scare Tactics- Many collections agencies will try to threaten debt collectors and scare them enough so they will pay their debt. They may threaten to have the individual arrested or threaten to take the individual’s property as compensation for the debt. This tactic is illegal and often leads individuals to file personal bankruptcy.
- Misleading- The law states that these agencies are not allowed to impersonate anyone other than a debt collector. They can not pretend they are a police officer, the government, or a lawyer to get you to pay your debt. They can also not mislead you by collecting a debt that has surpassed the statute of limitations for your state or increase the debt by adding on interest and collection fees, unless your state allows for it. These tactics are all things that can cause enough stress to force an individual into filing personal bankruptcy unnecessarily.
How To Avoid Having to File Personal Bankruptcy
If you are being coerced into paying off debt due to illegal collection tactics, you may think the decision to file personal bankruptcy is your only choice. However, you have several other choices you can make that will help you avoid having to file personal bankruptcy.
- Demand written verification of the debt. The collection agency has to provide you with information if you ask for it.
- If you don’t believe the debt is yours, check your credit report to see if you have been the victim of identity theft.
- Write a cease and desist letter to the collection agency. After you send this to them, they will no longer be able to call you and harass you about the debt. Taking the pressure off can help you to gain more clarity about your decision to file personal bankruptcy.
- If the debt is not yours or you believe the statute of limitation has passed, write a debt dispute letter. Until the collection agency is able to prove the debt is really yours, they can not contact you and you can avoid having to file personal bankruptcy.
- Contact a fair debt attorney if the collection agency has violated the FDCPA. If you win your case, you will receive compensation for actual damages, fees for your attorney, and statutory damages up to $1000.
- File a complaint with the Federal Trade Commission. Your experience will help them determine whether they need to file suit against the collection agency. Remember, the pressure may not feel overwhelming now, but a complaint takes time to process. If you wait, you may feel forced to file personal bankruptcy.
If you are thinking about having to file personal bankruptcy, take a step back and consider the reasons. If a collection agency is breathing down your neck and you don’t have the money to pay them immediately, you may have other options. Don’t file personal bankruptcy just because they are harassing you.
For more information on filing personal bankruptcy or to learn more about laws and actions concerning personal bankruptcy, continue to follow our website.
