Your Protections Against Creditor Harassment—With or Without Bankruptcy

In these times of layoffs and slow economic growth, many people in Tampa and throughout Florida are having problems keeping up with their bills and financial obligations. Many Florida residents who get behind on their bills often have to face the unfortunate reality of dealing with debt collectors.

While some collection agencies follow the law when collecting debts, others can cross the line into harassment, making the experience needlessly unpleasant for those who owe money. Fortunately, there are legal protections against such behavior-both in and outside of bankruptcy.

The Automatic Stay of Bankruptcy

An individual who decides to file for bankruptcy immediately receives the protection of the automatic stay. The automatic stay protects creditors and debt collectors from continuing to collect the debts owed by the individual. This means that creditors and debt collectors are legally prohibited from calling (or otherwise contacting) the individual to collect any debts owed.

If a creditor or debt collector violates the stay and tries to collect the debt, they can face penalties. Under the bankruptcy code, an aggrieved individual can recover damages, including court costs and attorney’s fees for each violation of the stay. In extreme cases, the court may award punitive damages on top of all other damages.

Although the automatic stay offers powerful protections against creditor harassment, it does have some exceptions. For example, it does not prevent collection of certain debts that are not covered by bankruptcy such as child support or alimony payments.

Once the individual has completed bankruptcy and received a discharge of his or her debts, debt collectors cannot take any other action against the individual (i.e. phone calls or lawsuits) to recover the prior debts that were covered by the discharge.

Rights Outside of Bankruptcy

Individuals do not have to file bankruptcy to receive legal protection against creditor harassment. A federal law, the Fair Debt Collections Practices Act (FDCPA), gives individuals a powerful safeguard against harassment. This law sets the rules for communications between debt collectors and individuals and prohibits unfair, abusive or misleading debt collection tactics.

The FDCPA applies to the collection of personal and household debts, not business debts. The law offers protection against those who are “debt collectors,” which the law defines as anyone who regularly collects debts that are owed to others, such as lawyers, collection agencies or companies who buy old debts for collection.

The FDCPA prohibits debt collectors from engaging in the following practices:

  • Using obscene language or threats of violence when collecting a debt
  • Calling individuals an unreasonable number of times or during very early or late hours of the day
  • Threatening to imprison an individual if he or she does not pay the debt
  • Threatening a lawsuit or wage garnishment, unless they intend to do so
  • Making any other false statements to encourage repayment of the debt

The FDCPA allows wronged individuals to sue the debt collector for each violation of the act. Under the FDCPA, individuals may recover money damages that he or she suffered as a result of each violation plus the court costs and attorney’s fees incurred by bringing the lawsuit.

If an individual cannot prove that he or she suffered damages, recovery is still available. The FDCPA authorizes the judge to order the debt collector to pay the individual up to $1,000 for each violation.

An Attorney Can Help

If you are behind on your bills or are being harassed by creditors, you have several options. Contact an experienced consumer protection attorney who can advise you of your rights and debt relief options and recommend a sound strategy that will address your individual circumstances.