Collection Agencies and Bankruptcy
| December 5, 2011 | Posted by Monica D. Shepard, Esq. under Bankruptcy, Debt Collection |
Collection agencies are 3rd party companies hired to collect money for a debt. Collection agencies are commonly known as debt collectors as well as bill collectors (they’re known by harsher names too but I won’t print them here).
Anyone that has been behind in a payment or has a long term (or even short term) debt knows these folks all too well. The Fair Debt Collection Practices Act (“FDCPA”) allows them to call consumers between the hours of 8am-9pm. For debtors in need of an 8am wake up call, bill collector calls could definitely suffice.
When talking with prospective bankruptcy clients one of the main reasons they have considered filing is that they are sick and tired of all the calls from bill collectors. From the time they wake up in the morning until the time they go to bed the phone is ringing non-stop. While some of the bill collectors have “semi-pleasant” personalities the majority of people tell me that the bill collectors were rude and demeaning to them. Several confessed to breaking down in tears due to the humiliating nature of the calls.
And there are numerous stories of debt collectors violating FDCPA laws and threatening consumers with arrest (they can’t have you arrested) and the loss of child custody (they can’t have your kids taken away).
Most people I encounter WANT to pay their bills but unfortunately they CAN NOT. But REGARDLESS, debt or no debt…no one should have to deal with that.
One of the upsides of bankruptcy is the END OF COLLECTION CALLS . When bankruptcy is filed an “automatic stay” goes into effect. The automatic stay works by stopping ALL collection activities. That’s right, ALL (and they cannot begin again without approval from the court). That means collections agencies MUST STOP, sending you collection letters, STOP calling you trying to strong arm you for money and STOP, threatening you with lawsuits.
While many bill collectors obey the FDCPA, many do not. Violations of Automatic Stay restraints are serious infractions. In those cases, legal action should be sought to end collection agency misbehavior and to make them comply with the law.
photo credit: zaphad1
This post is part of The Bankruptcy Alphabet Series.
For other variations on the letter “C”, visit the following links:
C= Creditor- Jay S. Fleischman, New York City Bankruptcy Attorney
C = Creditor’s Meeting- Raymond Kempinski, Philadelphia Bankruptcy Attorney
C = Counseling- Cathy Moran, Northern CA Bankruptcy Attorney
C = Cramdown- Robert Doig, Colorado Springs Bankruptcy Attorney
C = Cosigner- Bill Balena, Ohio Bankruptcy Attorney
C = Cars- Jeena Cho, San Francisco Bankruptcy Attorney
C = Cramdown- Stuart Ing, Hawai Bankruptcy Attorney
C = Credit Card Tips- Bret Nason, Platteville, WI Bankruptcy Attorney
C = Costs Filing-Dorota Trzeciecka, Surfside, FL Bankruptcy Attorney
C = Congress-Christine Wilton, Los Angeles Bankruptcy Attorney
C = Credit Counseling-Mark Markus, Los Angeles Bankruptcy Attorney
C = Claims -Stokely Martin, Chesterfield, MO Bankruptcy Attorney
Very well written and true article. This is pretty much what our clients tell us in Philadelphia – while some collectors seem to be “decent” and even helpful, there are others that are extremely disrespectful and combative.
While there are so many unpleasant myths out there about filing bankruptcy, I have to say thank you in a sense to the “indecent” collectors for driving individuals to seeking the truth about bankruptcy from a bankruptcy lawyer. I am told by many clients after hearing the truth they feel as if the albatross has been lifted from their neck.
Thanks Monica!
Kim Coleman
Philadelphia Bankruptcy Lawyer
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