Consumer debt is an ordinary part of American life, and millions of Americans have mortgage payments, car loan payments, student loan payments, medical debt, credit card bills and other types of debts. For many of us, these burdens are difficult, but not overwhelming. But this situation can change quickly when we lose a job, when someone in our family gets sick or injured, or we face some other type of unexpected financial setback.
Those who have been fortunate enough to never face serious debt problems may not understand how frightening the experience can be. It’s scary when you don’t know how you are going to get out of a financial hole. It’s even worse when a debt collector is writing you letters, calling you or worse.
Limits on debt collection
Fortunately, there are legal limits on debt collection practices. The U.S. Fair Debt Collection Practices Act and other laws impose a number of important limits. Among other prohibitions, debt collectors are barred from:
- Using threatening or obscene language.
- Going to a debtor’s place of employment to demand payment.
- Contacting a debtor before 8 a.m. or after 9 p.m.
- Discussing a debtor’s debt problems with anyone other than the debtor.
- Lying about who they are,
If they violate these rules, debt collection agencies face serious penalties. Still, debt collectors often test the limits. They may call frequently during allowed hours, and they can make life pretty hard for a debtor who is having trouble paying.
Creditor harassment and the immediate stay
Perhaps the quickest way to stop creditor harassment is by filing for personal bankruptcy. When a person files for Chapter 7 or Chapter 13 bankruptcy, the court issues a stay, which is a court order that tells creditors to cease all collection efforts immediately, for the duration of the bankruptcy process.
Depending upon the type of bankruptcy involved, the process could go swiftly or take place over several years, but during that time the person is freed from the scary letters and frightening phone calls while they work out a plan to escape the financial hole that has been threatening to swallow them.