How Bankruptcy Can Help You Deal with Debt Collectors

Debt comes with a great deal of baggage, especially when you’re overwhelmed by it. Nobody wants to have debt, but an affordable mortgage or car payment each month is manageable and considered “the norm.”

However, when you have so much debt that you barely have enough to afford you’re living expenses each month, or that you’ve fallen behind on payments, debt becomes downright crushing.

What Happens When You Fall Behind?

Anyone with serious debt problems who has fallen behind on payments knows how aggressive debt collectors can be.

For many, collection efforts are the worst part of financial problems. They can handle damage to their credit and giving up their ability to get loans in the future, but they are unable to deal with the endless phone calls and letters demanding payment.

And this is assuming the actions by a debt collector are within the law. There are plenty that straddle the line between legal and illegal practices, and some that just step right over it, willing to risk their right to collect a debt because they know they might be able to intimidate you into paying.

Knowing Your Rights

The good news is there are laws in place to protect you from aggressive creditor harassment.

Debt collectors can still cause a great deal of trouble, but there are things they are legally not allowed to do and if you can prove they are doing these things it will work in your favor.

Collectors have a limited number of tools in their toolboxes early on, so many try to shame debtors into paying their debts voluntarily. If they know a debt is too small or too old to pursue in court, they might try to convince you to pay without legal action. Understanding the statute of limitations on a debt and knowing what actions cross the line between legal and illegal can go a long way in helping you deal with collection efforts.

Knowledge is power and the more you know about your rights as a debtor the better.

To learn more about what debt collectors can and cannot do, read these guidelines from the FTC.

Know Your Options

Once you know enough to protect yourself against daily collection efforts, you can focus on your options for resolving the debt.

Obviously, the best option is to pay off the debt in full and meet your obligation, but this is rarely possible for people who have fallen behind on debts. If they could’ve afforded their payments creditors would not be harassing them in the first place.

You also have the option of settling the debt for less than the total amount owed or consolidating multiple debts into one single debt with one single monthly payment. Both of these options can help, but they also have consequences and you’ll want a complete picture of what you’re getting into before making a commitment.

Every situation is different and it’s important to consult a debt expert before making your choice.

Bankruptcy

One of the best ways to deal with collection efforts is to file for bankruptcy. It won’t solve all of your financial problems, but it will stop debt collection immediately. By law, once you file, creditors must stop contacting you regarding your debt. Not following this strict boundary can get them into trouble.

If you’re drowning in debt and the daily calls and debt collection efforts have gotten out of hand, bankruptcy can help. For more information or to schedule a consultation to discuss your options, contact the Law Office of Robert M. Geller at 813.254.5696.