Creditor Harassment Doesn't Have to Be Your Reality

People overwhelmed with debt have to deal with the anxiety that comes with a never-ending stream of creditor calls, letters, and harassment at home and at work.  Fortunately, there are laws that protect consumers from bill collector harassment and steps you can take to improve your debt, so harassment stops.  

Laws that Help
The federal government instituted the Fair Debt Collection Practices Act (FDCPA) to protect individuals from unfair collection methods, including harassing calls and calls outside of normal business hours. The law prohibits bill collectors from harassing or abusing you or doing anything that is unfair or deceptive when they are collecting debts.

Bill collectors must:
•    Identify themselves as such, provide their names, and not pretend to be someone else.
•    Not call you before 8 a.m. or after 9 p.m.
•    Not call you at work – provided that you have notified them your employer does not approve of bill collectors contacting you there.
•    Not threaten to put you in jail.

However, the protections of the law are not unlimited. The FDCPA applies only to personal and family and household debts, such as credit card debts, car loans and charge accounts. It does not apply to business debts, and it does not give you the right to avoid your debts. You will still owe your debts unless you do something that not only stops harassment but eliminates what you owe.

In general, you can stop debt collectors permanently only by paying what you owe, working out a debt settlement or consolidation plan, or filing for bankruptcy.

1) Debt settlement
This involves negotiating debts with your creditors and agreeing to a reduced payment in satisfaction of your total debt. Creditors will often accept a reduced payment since they know they would get less if you filed for bankruptcy. You will be allowed a certain amount of time to settle your debts, normally 36 months. If considering this option, you should consult a debt settlement lawyer for advice.

2) Debt Consolidation
Debt consolidation involves taking out a new loan to pay off several older debts.  The goal is to have a lower interest rate and longer period to pay off the new debt than you had for the old ones. A debt consolidation service becomes the middleman between you and your creditors and negotiates reduced payments. You then make one monthly payment to the consolidation company and they pay your creditors, so you no longer have to deal with them. You can consolidate debt through a secured loan (usually secured by equity in your home) or an unsecured loan, where the consolidator simply lends you the money.

3) Bankruptcy
If you decide to file for bankruptcy in Ohio, there is an automatic stay provision which goes into effect as soon as you file.  This prohibits most creditors from collection activity, such as harassing phone calls, lawsuits, garnishments, repossessions, and foreclosures. While some types of debts cannot be discharged in bankruptcy, others will be eliminated completely or be restructured so that you can afford to pay them. You may be able to wind up keeping your home, your car, and most, if not all, of your possessions, and you can begin to rebuild your life.

The most common types of bankruptcy are Chapter 7 and Chapter 13, and creditors are handled differently in each case.

Chapter 7 bankruptcy allows you to discharge many types of debt quickly, often in a matter of months.  It stops, prevents or resolves collections, loan deficiencies, repossessions, wage garnishment and civil judgments. While you might have to sell property to help pay off creditors, there are many Ohio bankruptcy exemptions, so if you do not own much property, your possessions may be all be exempt, qualifying you for a “no asset” case.
Chapter 13 bankruptcy allows you to reorganize assets, consolidate your payments and repay some or all of your debt affordably over a three- to five-year period. If you complete your court-approved repayment plan, you will receive a discharge that eliminates most of your remaining debts. To file Chapter 13 bankruptcy you must have a regular source of income and enough disposable income to meet your Chapter 13 payment plan.

Be aware that there are some debts that cannot be discharged in bankruptcy.  You must still repay these debts after a Chapter 7 discharge or pay them in a Chapter 13 plan. A consultation with a debt-relief attorney will help you decide which option is best for you.

From the Author: Stop Creditor Harassment