As discussed previously in this blog, when Colorado residents are facing tough financial challenges, it can be intimidating and scary. Adding to this intimidation are the actions of debt collectors, who can be difficult to deal with at best, and downright scary or unlawful at worst.
Fortunately, individuals have recourse when dealing with overaggressive debt collectors. Recently, a debt collection firm was assessed a $3.2 million fine by the FTC for engaging in certain collection practices. This is the largest fine ever assessed on a third-party debt collector, and demonstrates the seriousness of the unlawful practices.
The debt collection firm had called at all times of the day and night, at people's homes and workplaces, even when they knew employers prohibited the calls. They also called individuals after promising to stop, and after individuals asked them to stop.
Under the Fair Debt Collection Practices Act, these measures are illegal. In general, debt collectors may not engage in harassing or threatening behavior, make false statements or use unfair collection practices.
While individuals have some recourse under the Fair Debt Collection Practices Act, they also have the means to stop creditor harassment under Chapter13 bankruptcy. After filing for Chapter 13, an automatic stay against all collection activities is imposed, meaning creditors have to cease their efforts to collect on debt.
Chapter 13 thus gives debtors some relief, while helping the individual to create a repayment plan that solves their financial challenges at the same time. To see if individuals qualify for Chapter 13, and what all of the benefits are, individuals should contact a qualified bankruptcy attorney.
Source: ABC news, "Debt Collection Giant Slapped With $3.2M Penalty," Susanna Kim, July 9, 2013