For years consumers have enjoyed the protection of the Fair Debt Collection Practices Act. Codified in 1977, the Act outlines very specific rules debt collectors can use—and those they cannot—in order to collect money owed to the original creditor.
For example, say you owe Sears $700.00 for that emergency refrigerator purchase. But two months into payments, you lose your job. Before you know it, within months, you have completely defaulted. Sears calls you—but to no avail, because, as they say, you can’t get blood from a stone and you simply do not have the money to pay them.
So now what?
A few months after that, you receive communication from a debt collector. That debt collector cannot harass you, cannot threaten legal action they don’t intend to take, cannot trick you into signing a default judgment, cannot call you at work (by this time you are employed again) and cannot call your neighbors to find out where you are working, when you work, or just to embarrass you.
Yes, debt collectors do, in fact, resort to such measures. And you as a consumer have very specific rights. If a debt collector violates these laws, you can, in turn, sue them and recover damages.
But what happens when it is not just a Sears bill? What happens when you develop a systemic strep infection that requires a CT scan, 4 days in the hospital, and I.V. antibiotics, and your high deductible health care plan doesn’t kick in until you cover the first $11,000?
Suddenly not only Sears, but your car, your gas card, and your mortgage payments are late. The hospital is calling, you don’t have 11K available and you don’t know what you are going to do. You think if you could just have a couple of years to get it all sorted, you might be able to cover most of those bills, but the creditors don’t want to give you a couple of years–they want their money now.
Is bankruptcy the answer?
That’s where bankruptcy can be the lifeline you need. Sure, you have never defaulted on your debts before and you never planned on it. But help like this is exactly why the bankruptcy code was written.
There are times when bills, through no fault of our own, go from bothersome to burdensome–and bad luck and a confluence of difficult circumstances are exactly the times when we need some help.
The very moment you file bankruptcy is the moment you can feel complete relief. That moment is the point in time when all contact from creditors must stop—nary a phone call nor a letter can be sent to you after that time.
Your attorney becomes the conduit with the companies and the two of you can decide together whether you want to file bankruptcy that reorganizes your debt (Chapter 13) or gives you a completely clean slate (Chapter 7). In either case, at that moment you are free to concentrate once again on the most important things in your life–your family and your health.
