Sunday, April 10, 2005

Ending Creditor Harassment

Under the Federal Fair Debt Collection Practices Act, creditors cannot "harass, oppress, or abuse any person in connection with the collection of a debt". Common examples of illegal harassment are:

  • The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person
  • The use of obscene or profane language or language, the natural consequence of which is to abuse the hearer or reader
  • The publication of a list of consumers who allegedly refuse to pay debts, except to a creditor
  • The advertisement for sale of any debt to coerce payment of the debt
  • Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number
  • The placement of telephone calls without meaningful disclosure of the caller's identity.

Debtors have two basic options when dealing with creditor harassment. First, the debtor can attempt to end creditor harassment by attempting to reason with the by yourself. You can talk with creditors when they call and honestly explain why you are in default. You can try to reason with creditors and ask for payment extensions or alternative payment arrangements. Unfortunately, debt collectors can be unreasonable and this method will often prove insufficient.

If the creditor will not listen reason, you can send the creditor a "cease & desist" letter instructing them not to contact you. Once the creditor receives this letter, the creditor cannot contact you except under very limited circumstances. Violation of the Fair Debt Collection Practices can result in substantial penalties against the creditor.

Another option is for bankruptcy. Under bankruptcy law, creditors and debt collectors must stop virtually all debt collection activities, including contacting you about a delinquent account. As soon as you file for bankruptcy, all creditors and bill collectors must immediately stop their collection efforts. Once you file the bankruptcy petition, both the Bankruptcy Court and your attorney will notify all of your creditors of your bankruptcy through the mail. While it might take a week or so for your creditors to receive this notice, creditors must also stop calling if you inform them that you filed a bankruptcy petition. In order to ensure creditors stop harassing you, the law provides penalties and fines for debt collectors that continue to contact you after you have filed for bankruptcy.

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This publication is NOT INTENDED TO SERVE AS A SUBSTITUTE FOR LEGAL ADVICE. Please consult with a licensed attorney if you require legal advice.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

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