SUMMARY: Generally, bankruptcy immediately stops most creditor harassment. Creditors are ordered to stop all garnishment, lawsuits, levy, foreclosure and contact. Outside of bankruptcy, you may be able to file a complaint or sue for illegal debt collection.
Filing bankruptcy to stop creditor harassment
The biggest advantage to bankruptcy is that the automatic stay is designed to stop creditor harassment and let you focus on getting back on your feet financially. Once the bankruptcy is filed, a court order called the automatic stay orders most debt collection action against you stop immediately. This includes lawsuits, repossessions, levies, garnishments, and foreclosures. Certain actions, like criminal proceedings or collection of alimony or child support can continue even after filing bankruptcy.
Filing a complaint to stop creditor harassment
Often, people suffer from stress, anxiety and depression due to merciless harassment by creditors. They sometimes report receiving in excess of fifty phone calls per day; calls at work; embarrassing notes left at their homes; veiled and sometimes outright illegal threats. Federal and Texas law limit what a collector can do and say to collect a debt. If you are being unfairly harassed by creditors, you may be able to sue the debt collector under the Fair Debt Collection Practices act even if you owe the debt. The Texas Attorney General Consumer Protection Division provides more information on protection from Texas debt collectors. You can also file a complaint with the Consumer Finance Protection Bureau.
Send a certified letter to debt collector to stop contact
Under the Fair Debt Collection Practices Act, a third party debt collector must stop all contact upon written notification from you. A debtor can write a letter telling them to cease and desist all contact. This federal act does not apply to the creditor — only to collectors acting on behalf of the creditor. The National Consumer Law Center publishes recommended steps for “Dealing with Debt Collection Harassment,” including a suggested letter to send to debt collectors. The Consumer Finance Protection Bureau also has information and suggested templates for responding to debt collectors. If you have been sued or believe you may be sued, consult with an attorney about your rights and the options both in and out of bankruptcy that may be available to you.
Your Next Step to Debt Relief
If you are struggling with debt, consult with an attorney who can give you guidance on options available to you. Each case is different and consultation with an attorney knowledgeable about the law as it applies to your particular circumstances is an important first step in resolving debt.
Read More About Bankruptcy and Debt Relief
Chapter 7 – Usually the cheapest and fastest type of bankruptcy, Chapter 7 can wipe out credit cards, medical bills, and loans.
Chapter 13 – Does everything that Chapter 7 does, but with the added benefit of being able to help catch up on past due mortgages, car payments, and taxes.
Taxes – If you owe money to the IRS, there may be several different options for you, including some non-bankruptcy options.
Student Loans – There are many solutions to student loan issues, including getting a better payment plan, curing a default, and even loan forgiveness.
Debt Lawsuit Defense – When a creditor sues you over a debt, you can respond with a defense, which may allow you to win the lawsuit.
Loan Modifications – A special agreement between you and your mortgage lender might help you with a past due mortgage loan.
Debt Library – More in-depth articles on some of the more detailed areas of bankruptcy and debt relief.