Fighting Creditor Harassment and How Bankruptcy Can Help
It is not uncommon for people to struggle with overwhelming debt, especially in situations involving unexpected medical treatment, ballooning inflation, and a range of other financial stresses. Falling behind on your finances can be stressful, especially when debt collectors start calling and taking action. Thankfully, there are legal tools at your disposal to help combat creditor harassment, including the federal Fair Debt Collection Practices Act and filing for bankruptcy.
Defining Creditor Harassment and Common Tactics
What constitutes creditor harassment? Creditor harassment includes the relentless tactics debt collectors employ to intimidate individuals into repaying unpaid debts. Examples of creditor harassment tactics include:
- Incessant phone calls: When debt collectors make multiple phone calls daily to pressure individuals into paying.
- Intimidation: When collectors threaten legal action, wage garnishment, or even asset seizure to coerce payment.
- Aggressive communication: The use of insulting, demeaning, and offensive language to emotionally disturb consumers.
- Public shaming: Conduct designed to shame consumers, including public disclosure of their debt situation to family, friends, or employers.
Thankfully, debtors have legal protection against debt collector harassment under federal law. The FDCPA establishes clear rules and guidelines that apply to debt collector communications with debtors, such as:
- Restrictions on calling hours
- Prohibitions against harassment or abuse
- Prohibitions against deceptive practices
Dealing with Harassment
Debt collectors who violate the FDCPA may be liable to pay damages to the consumer, including the costs of litigation.
Under Section 805 of the FDCPA, debt collectors may not communicate with a consumer at an unusual or inconvenient time. Debt collectors must assume that a convenient time to call is between 8 AM and 9 PM in the consumer’s time zone. Importantly, debt collectors may not directly communicate with consumers if they know they are represented by an attorney with respect to the debts they are trying to collect.
Documenting communications and conduct violating the FDCPA is essential for making a civil claim against the debt collector. If you are being subjected to creditor harassment, remember to:
- Log the date and time of calls.
- Record all discussions to the extent allowed under Arizona law.
- Let a third-party witness listen in on communications.
- Make copies of letters, emails, or texts.
Bankruptcy as a Solution
Filing for bankruptcy can be a powerful tool against creditor harassment. Once filed, the bankruptcy court imposes an automatic stay that prohibits a wide range of creditor actions, including:
- Collection calls and letters
- Collection lawsuits
- Wage garnishments
- Repossessions and foreclosures
- Utility disconnections
- Collection of certain taxes
Filing for Chapter 7 bankruptcy offers additional protections against creditor harassment. In a Chapter 7 bankruptcy, a trustee gathers and sells the consumer’s assets and uses the proceeds to pay off certain debts. Importantly, certain assets are excluded from sale, such as the consumer’s home, car, and other essential assets.
Any unsecured debt not covered by the sale is discharged under Chapter 7 bankruptcy, including credit card debt, medical bills, and other debts. The bankruptcy court relieves the consumer of liability to repay those debts.
Under Chapter 13 bankruptcy, the court and consumer organize a three-to-five-year repayment plan based on the consumer’s income, living expenses, and outstanding debts at the time. During the repayment plan, the consumer makes payments to a bankruptcy trustee who disburses funds to repay creditors. Importantly, Chapter 13 lets consumers retain their assets. At the end of the repayment plan, any outstanding unsecured debts may be discharged.
Hire an Arizona Bankruptcy Lawyer You Can Trust
Fighting creditor harassment and exploring bankruptcy options requires a sophisticated understanding of the FDCPA and bankruptcy laws. To fight against debt collector harassment effectively, you should seek counsel from an experienced attorney who can explain your legal options and protect your rights.
If you are eager to free yourself from the stress of mounting debt and rebuilding your financial future, Hilltop Law Firm is here to help. Our Phoenix bankruptcy lawyer provides compassionate legal services that explore your legal rights and options for fighting creditor harassment.
Call us at (602) 466-9631 to schedule a free consultation today.