Creditors and collection companies can be overly aggressive when collecting money from those who owe them. While there are laws creditors must follow, their actions and attempts to have you settle your debt can feel like harassment.
What methods do creditors use to collect payment?
Creditors employ different methods when collecting payment. They may call you multiple times a week, either on your mobile or your home phone. They may even attempt to contact your place of employment. They may also send intimidating letters and messages. They could threaten legal action that may lead to garnishment of your wages or a lien against your property.
While creditors have certain rights when seeking to collect debts, they should not violate fair debt collection practices.
It is important to remember that even if you owe money, you have rights and options. If you can no longer cope with the stress of payment and creditors’ collection efforts, you may want to consider filing for bankruptcy.
How does bankruptcy help?
Bankruptcy usually leads to an immediate cessation of collection efforts. The process can take a long time, so the courts intervene as soon as you file for it. They usually issue an automatic stay the same day they accept your bankruptcy paperwork. An automatic stay stops collection activity and may result in the dismissal of any pending lawsuits against you.
Once you have successfully filed for bankruptcy, you may potentially discharge the balance left on your unsecured debts. Creditors can no longer contact you regarding these debts after the discharge. They can also not sell them to third parties or hire a collection company to collect your money.
Bankruptcy may leave an unsavory impression, but it can be a powerful tool to help minimize or eliminate your financial issues. It may also be a means to end the immediate stress caused by collection efforts. Learning more about bankruptcy and how it can help you reshape your financial future may benefit you.