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From Bad To Worse: Debt Collection, Bankruptcy, And You

27 June 2018 by Kenneth Graham

If your debt load has turned into a problem and the phone calls and letters from collection agencies have become constant, you may have become a bit numb to the barrage. In some cases, things have gone so far that a debt has been "sold" to a third-party debt collection agency. Creditors often rely on these agencies that specialize in aggressive collection techniques to bring in at least some of what is owed with the collection agency profiting by a percentage of debt collected.

Constant Contact

There are some rules on the books that regulate the behavior of debt collection agencies and creditors, but the constant calls and letters may still make you feel overwhelmed. Most collection agencies are legitimate agencies who use charm and sympathy instead of force to encourage debtors to pay some of what is owed. There are, however, another class of collection activities that are far from pleasant to deal with.

Not Legitimate

In contrast to legitimate collection agencies, the following heinous activities are often perpetrated by a few single individuals. Your financial records may have been compromised by a business's careless actions, and now your information is out there. These people have just enough facts about your debts to make them seem legitimate.

Knowing what to look for may save you some peace of mind and some money, and you are not likely to be in any position to lose any. When you are stressed over your financial situation, you may be more likely to fall prey to these unscrupulous thieves, however.

Arresting Behavior

One of the more common and misleading tactics used by these thieves is the threat of arrest and jail. No one wants to imagine that their failure to pay some bills could lead to jail and for the most part that is an idle threat. The only time that you might face arrest and jail time for failing to cover your debts is for back child support or taxes. When you owe the IRS or the child support enforcement agency, then you will have already had plenty of advance knowledge about the consequences. If you are in doubt about the threat, hang up and phone your local law enforcement agency to ascertain information about any arrest warrants.

Form of Payment

Another red flag of a rip-off is the payment method accepted by the caller. Legitimate agencies will usually accept checks or credit cards. These callers, however, may insist that you pay via wire transfer, which cannot be traced back to them. If you are being asked to pay using a MoneyGram or by a prepaid credit card, just hang up on the caller.

When your financial situation has worsened to the point that you can no longer pay your bills, there is a legal solution. Bankruptcy can provide you with immediate relief from all forms of debt collection and provide you with a fresh start. Speak to a bankruptcy law firm about your situation and find out what a chapter 7 or 13 filing could do for you.

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