Creditor Harassment

Can bankruptcy put an end to creditor contact and abuse?

Being overwhelmed with debt is stressful enough, without the constant phone calls, letters, threats and harassment by creditors and debt collection agencies. When subjected to creditor harassment, a debtor may be left feeling helpless, frustrated and angry. It is in these situations that a debtor may benefit from involving an attorney. The conduct of the debt collectors or creditors may actually be illegal, meaning you may be able to take legal recourse to stop the abuse and even seek financial damages. Even if they are not breaking any laws, you may be able to seek immediate relief by filing for bankruptcy.

Fair Debt Collection Practices Act (FDCPA)
Added as Title VIII of the Consumer Credit Protection Act in 1978, the Fair Debt Collection Practices Act (FDCPA) is a federal statute that was created to eliminate abusive debt collection practices, among other things. This act prohibits certain "abusive and deceptive" conduct by debt collectors in their dealings with borrowers, including: using abusive language or profanity, contacting borrowers at odd hours of the day/night, continuing communication after receiving a written request to cease, threatening legal action that is not actually allowed by law and reporting false information. Borrowers who are subjected to this type of conduct may be able to take legal action against the at-fault debt collector.

How Bankruptcy Affects Creditors
Once you file your bankruptcy petition, the court will issue an "automatic stay." This is a temporary injunction that prohibits any and all debt collection activity against you and may include all forms of contact from creditors or debt collectors, collections lawsuits, wage garnishment, repossession and even foreclosure. Through the duration of your bankruptcy case, you will be protected from creditors and debt collectors alike. Your financial obligations to these companies will be satisfied through the liquidation of assets (under Chapter 7) or a repayment plan (under Chapter 13 or Chapter 11). All of this is handled via a bankruptcy trustee and the court. At the conclusion of your case, your debt will be discharged and you will have no further obligation to those creditors.

There is no reason a borrower should have to put up with creditor harassment or abuse. Whether or not the acts have been made in violation with the Fair Debt Collection Practices Act, a borrower may have various options to put an end to the constant phone calls and harassment. A qualified attorney may be able to offer accurate insight and guidance pertaining to these matters.

If you're dealing with creditor harassment or have questions about this subject, find a local bankruptcy attorneywho can help you.