Are Collection Agencies Allowed to Use Scare Tactics?

Last month, the Federal Trade Commission and New York Attorney General forced a debt collection agency to shut down for violating federal laws that protect consumers from harassment and intimidation.

Under the Fair Debt Collection Practice Act (FDCPA), debt collectors are legally obligated to play nice. Debt collectors cannot harass borrowers by using abusive language or by falsely representing themselves. The debt collection agency shut down last month was found to be doing both.

By pretending to be government agents, law enforcement officials and attorneys, the collection agency was able to manipulate debtors into thinking they had committed a criminal act and faced imprisonment unless they made immediate payments on debts. Ironically, it was the debt collection agency committing criminal acts.

Can Filing for Bankruptcy Stop Debt Collector Harassment?

Although most stories of debt collection are not so severe or illegal, many Americans can face similar harassment without knowing what options are available. Borrowers who are late on payments or in collections might feel apprehensive every time the phone rings.

Fortunately, filing for bankruptcy can put a stop to the harassment right away. Upon filing for bankruptcy, the court will put a halt on attempts to collect all debts, meaning collection agencies are no longer allowed to call you.

Depending on whether you are an individual or business, speaking with an attorney about filing for a Chapter 7, 11 or 13 bankruptcy can help you feel at ease again when your phone rings, in addition to numerous other benefits that could help give you a fresh start on your finances.

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The Sader Law Firm – Kansas City Attorneys