Ring! Ring! Ring! You look at the phone and see that unknown number flash on the caller ID. The phone may not know who is calling, but you certainly do- it is the collections agency again, insisting that you pay your debts. When you are in a financial slump, these creditors can become an ever present, always pressing enemy. In many cases, the easiest way to erase monumental debt and satisfy creditors is to declare bankruptcy. By filing for bankruptcy, people can start fresh, and get rid of the debts that are pounding at their door and beckoning through their cell phones.

Yet before you jump in and choose to declare bankruptcy and reassess your finances, you may want to confirm that your creditors are credible. Recently, a debt collections' scam in West Virginia helped inform the nation of the dangers of dishonest debt collectors. The West Virginia Attorney General filed a lawsuit against seven unlicensed debt collections companies in April. He claimed that the companies were impersonating law enforcement and harassing their borrowers over the phone. The companies even used intimidating, false threats and collected non-existent debts. They also hampered borrowers about debts that were already paid, in order to force their victims to pay more money.

The Attorney General told the Huffington Post that his office is flooded with complaints against dishonest debt collectors. The companies collecting these fabricated debts refuse to be licensed and hide from the public's eye, so that they can evade regulation and steal money from borrowers. According to Federal Trade Commission statistics, 17 percent more people complained about debt collectors in 2010 than in 2009. The number of complaints may be rising, but so is the amount of Americans in serious debt. A Roosevelt Institute representative says that one in seven Americans is being pursued by a debt collector.

Because so many borrowers refuse to repay their arrears, or are too tied up financially to satisfy creditors, the men and woman at collections agencies have turned to more aggressive tactics. While it is illegal to threaten or impersonate another person when calling on behalf of a debt collection company, these men and women are pulling out all the stops to get the money they want. Allegedly, many collectors will call and curse out their borrowers, or will lie in order to get the money back. Often times they will inflate the amount owed or say that they did not receive debts in order to get more money.

All of these unlawful tactics have pushed many firms' revenues to record highs. Officials are trying to crack down on unlawful debt collecting. In January, one dishonest creditor company in Michigan was forced to pay $2.5 million to settle allegations of misconduct. The Federal Trade Commission froze the assets of seven California debt collection companies last year, because of their tendency to lie and threaten borrowers on the phone. The Consumer Financial Protection Bureau is also working hard to detect dishonest debt collectors. The men and women who are victim to verbal abuse by creditors sometimes receive profit from the lawsuits.

Next time you receive a call from a creditor, observe his or her demeanor and conduct. If your collector is vicious, violent, threatening, or untruthful, you should report this to the authorities. Never pay back a suspicious creditor until you have done a full background check. If the amount of money the debt collector claims you owe does not match the amount in your records, then make sure to double-check this before paying up, or taking a drastic decision like bankruptcy to pay for these debts.