When someone is really behind on their bills, it may seem like someone calls them every five minutes to ask for money. Most of the time, these callers will be satisfied if the person who is behind on payments explains what happened and asks for suggestions on how to get caught up. Many debt settlement companies are willing to work with the debtor to see what can be done to pay off the debt, but not all of them feel the same way. Some get tougher and think that if they scare someone, they will send the money faster. Some bill collectors go out of their way to live up to their bad reputation, even though there are laws in place to protect people from being treated badly.
Creditors can try to get in touch with you about past-due bills, but they can't be rude about it. The law says that it is harassment to use bad language or call a debtor a lot with the goal of making them mad so they will pay. Calling at odd times or at work after being told not to is considered harassment. Calling friends and family without permission is also considered harassment. No one has to answer a harassing phone call, especially one that makes a threat of violence. If bankruptcy is the only way out of the financial mess, the calls will stop.
The Fair Debt Collection Practices Act says that if trying to work things out with debt settlement companies doesn't work and you file for bankruptcy, the creditor or their agents must stop all collection efforts, including debt collection calls. If they keep in touch after knowing that someone has filed for bankruptcy, they may have to pay fines and other penalties. If they know that a debtor is being represented by an attorney, all contact must go through the attorney.
If the house payments are late, utility bills and shutoff notices are likely to come more often. This is especially true if the house is in foreclosure. When you file for Chapter 7 bankruptcy, the past-due balance is wiped out, and when you file for Chapter 13 bankruptcy, the past-due amount is paid through a court-approved plan.
Most of the time, student loans can't be gotten rid of through bankruptcy. However, getting rid of a lot of other debt through Chapter 7 could free up money to pay for student loans. If you have enough money to file for Chapter 13, you may be able to combine all of your student loans into one payment to the court.
Creditors taking money out of people's paychecks is a problem that can be embarrassing. The employer will know about your money problems, and some companies have rules about how many garnishments they can allow before taking action against your job. Even if the wages are subject to a court order, garnishment can stop right away if the person files for bankruptcy.
Filing for bankruptcy can be a good way to stop collection actions or claims that aren't true. If the amount claimed to be owed is inaccurate, filing for bankruptcy will eliminate the debt, regardless of the amount.
