Creditor harassment can be very stressful. Often creditors will retain a collection agency that will call at all hours, including while you are at work, hounding both you and any loved ones whose phone numbers they have. They may issue threats and file lawsuits. One benefit of filing for personal bankruptcy is stopping this kind of harassment. Serving clients through South-Central Alabama, an experienced bankruptcy attorney at Grainger Legal Services can help you reduce pressure from creditors by obtaining an automatic stay and other aspects of bankruptcy relief.Filing For Bankruptcy Can Stop Creditor Harassment
Filing for Chapter 7 or Chapter 13 bankruptcy automatically stays, or stops, all consumer debt collection activities and lawsuits. Certain judicial proceedings still may progress, such as those pertaining to divorce, spousal support, child support, or certain taxes. However, for many Americans, dischargeable consumer debt like medical debt and credit card debt produces the most distressing harassment, and this must stop when you file.
As soon as you file for bankruptcy, the automatic stay goes into effect. This means that as soon as they know of the bankruptcy, creditors, collection agencies, and government agencies need to stop all their efforts to collect your debts. The court will advise them, but you can also let them know if you want the harassment to stop immediately.
An automatic stay helps stop certain collection activities completely. For example, it ends wage garnishments. Typically, no more than 25 percent of your wages can be taken to satisfy lawsuit judgments, but up to 50 percent can be garnished for child support and alimony. However, in tough economic times, most people rely on their entire paycheck to get by, and getting rid of wage garnishment can make their lives significantly easier.
Some creditor activities are merely delayed rather than halted outright. For example, if your home is facing foreclosure, an automatic stay under Chapter 7 will only temporarily stop proceedings. Usually to save a home will require a Chapter 13 payment plan, which catches up the arrears. Similarly, a landlord planning to evict you can ask the bankruptcy court to lift the stay. If you are behind on utility payments, you can only prevent disconnection for 20 days with a Chapter 7 bankruptcy.
Some creditor harassment goes too far under the Fair Debt Collection Act (FDCA). This is a federal law that prohibits a debt collector from using deceptive or false means to try to collect a debt. Debt collectors may not:
- Contact you directly if you are represented by a lawyer;
- Disguise the caller ID to make the call appear to come from someone other than a debt collector;
- Threaten to put you in jail;
- Call your neighbors or coworkers and tell them that you owe money;
- Sue you after a debt is discharged in bankruptcy;
- Continue to try to collect on a debt if you have claimed identity theft that you are trying to correct;
- Use profanity against you or family members; or
- Call you early in the morning or late at night or at work multiple times, particularly if you have notified the creditor that you do not wish to be called in those situations.
Creditor harassment can cause significant stress, particularly if multiple collectors are harassing you. A skilled bankruptcy lawyer at Grainger Legal Services can evaluate the facts of your particular situation, advise whether filing for bankruptcy will help, and explore long-term solutions to your troubles. We represent clients in Montgomery, Prattville, Troy, and throughout South-Central Alabama. Call us at (334) 260-0500 or fill out our contact form to schedule a free consultation.