After a creditor charges a debt off they often sell it or send it to debt collectors for debt collections. Those debt collectors put accounts on auto-dial so you receive calls at all hours both at home and at work. But, there might be something you can do to stop the calls. If you file bankruptcy but the calls keep on coming, then the debt collection companies are in violation of the stay and you might have a right to file a contempt action against them. Additionally, through that contempt filing, to might be able to recover actual damages and attorney fees.
What Happens After You File Bankruptcy
When you file bankruptcy, the court orders a stay. The stay purposefully keeps creditors from legally collecting from you. At the end of the case, the court orders a permanent discharge. The creditor “charges off” the debt and gets a tax deduction for the loss. Furthermore, you do not pay the bill, and the debt shows up as a bankruptcy charge-off on your credit report.
Some creditors attempt to get around the law by continuing to call after the bankruptcy filing. However, if you can prove that they are in violation of the order, you can sue them. One of the best methods is to record their call and then surprise them in court when they deny making the call. Interestingly, creditors that ignore the law will not send you letters or put anything on paper after you file. However, they continue to make phone calls, or they sell the account to a debt buyer. Of course, the debt buyer will then start calling you.
You may also request that they contact you only via mail. However, telling them over the phone is not sufficient because you have no way of proving your request. Instead, you must send them a certified letter requesting that they only contact you via mail. The certified letter is your proof to the courts that you actually made this request.
Next, if you continue to get bills after you file bankruptcy, do this. First, make copies of your hearing notice. Then, when you get a bill from a creditor, send them a copy of the bill and the notice. The problem arises from creditors who continue to send bills even if they receive notice. It might be that their computer can’t stop sending out the bills. Or, they might simply be ignoring the stay, hoping that you will pay anyway. Either way, we can file a motion for contempt with the judge, and we might also be able to sue for a violation of the Fair Debt Collections Practices Act.
Your Rights Under the Fair Debt Collection Practices Act (FDCPA)
Under the Fair Debt Collection Practices Act, you may advise a debt collector to not contact you at work or at unreasonable times. In addition, they must make certain disclosures to you. The disclosure requirements include a statement that this is an effort to collect a debt. Attorneys must use the FDCPA statement that this is an action to collect a debt in evictions. The FDCPA only applies, however, to 3rd party collections such as collection companies and consumer debts.
Under the FDCPA, debt collectors must be truthful, fair, and treat debtors with dignity and respect. Any conduct that is harmful, oppressive, abusive, or invasive is improper. Although creditors read the law, they rarely obey it, because they think no one will catch them or sue them. However, be aware that a debt collector is a 3rd party company hire to collect the defaulted debt. The following are violations:
- Call without giving their identity
- Use obscene language
- Threaten arrest, violence, or lawsuits unless it is a legitimate possibility
- Pretend to be attorneys or law officers
- Misrepresent government affiliation or the character amount or status of the debt
- Use postcards
- Repeatedly call
- Remain on your property if you ask them to leave
Suing Creditors Who are in Contempt of the Bankruptcy Order
If a creditor ignores the court order and attempts to collect, a debtor may sue for actual and punitive damages plus attorney fees for contempt. Kentucky and Indiana allow recorded phone calls in court as evidence that a creditor continues to call and harass a debtor.
However, please note that the following states do not allow recording without permission: California, Connecticut, Florida, Illinois, Massachusetts, Maryland, Michigan, Montana, Nevada, New Hampshire, Pennsylvania, and Washington. Also, always keep logs of communication via phone calls, making note of the name of the person, the company name, and address. Also, add the details of the phone discussion to your log.
The good news is, if they are in contempt of the bankruptcy order, you might even profit by it. Although the FDCPA gives you rights, it only protects you from 3rd party debt collectors. Unfortunately, it does not protect you from the original creditor. So remember, if you file bankruptcy and obtain a discharge you have the right to sue creditors that continue collection attempts after they receive the order to stop.
The FDCPA also states you have the right to make a request to only receive debt collection efforts via mail. You may verbally request that they not call at home or work, but unless you send a certified letter outlining your request you have no proof that you made such a request. Remember, the FDCPA only applies to debt collection agencies or attorneys. However, the bankruptcy discharge protects you.
Stop Collection Calls
Credit card companies attempt to collect for about six months before turning your account over to collection attorneys or debt collection agencies. State laws normally require that credit card companies must stop unfair collection calls once they receive notification in writing. Again, you must notify them by certified letter to stop collection calls.
Even after you send the mail only request, it is allowable for attorneys and debt collectors to call you under certain circumstances. First, when they turn your account over to an attorney or if the status of your account changes, they can call to tell you what event is taking place. Secondly, if they sue you for the debt, they can call to notify you.
Do you need help getting your collection calls to stop? I am here to help you. Contact my office right away. Nick C. Thompson, Attorney: 502-625-0905