Bankruptcy is the permanent solution to creditor harassment

Although you have strong protections against creditor harassment under federal law, they cannot prevent the collection of a valid debt. If you are struggling financially, it is important to consider bankruptcy as a permanent solution to your problem.

Although most economists agree that the economy has improved since the 2008 recession, many people are still reeling from its effects. If you lost a job during the recession, you may have acquired debts that you are struggling to pay back, even if you later found other employment. You may also be hard up financially if you developed an illness or experienced another serious life issue.

If you have fallen behind on your bills, you may already be experiencing annoying and intrusive phone calls from your creditors or collection agencies on a daily basis. Although this situation can make you feel powerless, in reality, you have strong protections against creditor harassment under the Fair Debt Collections Practices Act (FDCPA). The FDCPA prevents creditors from engaging in underhanded collection tactics such as:

• Calling you at times that the creditor knows or should know is an inconvenient time for you. Under the law, calls may not be made before 8 a.m. or after 9 p.m.

• Speaking with third parties (e.g. employers or family members), if you have asked them to stop. In addition, a creditor may not call your place of employment if you have asked them not to.

• Calling you an unreasonable number of times, using threats of violence, being abusive or using foul language.

• Misleading you about the amount, character or legal status of your debt.

• Threatening a lawsuit when there is no intention of doing so.

If a creditor violates the provisions of the FDCPA, they can face significant penalties. Under the act, you may file a lawsuit against the creditor and recover any actual losses that you have suffered because of the violation. Additionally, even if you have suffered no losses, you are allowed to recover up to $1,000 per violation plus attorneys' fees and court costs, so it costs you nothing in most cases to assert your rights.

Obtaining permanent relief

Although the FDCPA protects against creditor harassment, your creditors may eventually sue you, obtain a judgment and begin garnishing your wages or other legal means to collect the debt. Because of this, if the debts that you owe are valid and you have little hope of paying them, it is important to consider filing bankruptcy, as it is a permanent solution to your debt problem.

Once you file bankruptcy, creditors must immediately cease calling you and engaging in other debt collection tactics (e.g. lawsuits or garnishments). During the bankruptcy process, depending on the type of bankruptcy filed, your debts are either wiped away outright or repaid in an affordable payment plan over three to five years. After you have completed bankruptcy, you are free of most of your pre-bankruptcy debts and can start a new financial life. Under penalty of law, your creditors may no longer attempt to collect any debt that was eliminated during bankruptcy.

If you are being harassed by creditors or would like to learn more about how bankruptcy (and other options) can help, it is wise to speak with an attorney. The experienced bankruptcy attorneys at The Law Office of Russell Gary Small, P.C., can explain the options available to you and recommend the best way to get you out of your dire financial straits.