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 of 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. Like criminal proceedings or collection of alimony or child support, certain actions can continue even after filing bankruptcy.
Read about how Chapter 7 bankruptcy or Chapter 13 bankruptcy can help.
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 more than fifty phone calls per day, calls at work, embarrassing notes left at their homes, veiled, and sometimes outright illegal threats. Federal and Texas laws limit what a collector can do and say to collect a debt. If creditors are unfairly harassing you, 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.