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Dealing with creditors before filing a bankruptcy petition

One of the most unpleasant aspects of a difficult financial situation faced by Kentuckians is dealing with the collection efforts of creditors. While many debt collectors are honest and law-abiding, some resort to tactics that can only be described as harassment. A far-reaching federal statute intended to stop creditor harassment may offer some protection before the last resort of bankruptcy.

The statute is the Fair Debt Collection Practices Act. It was passed by Congress for the sole purpose of prohibiting certain debt collection practices and thereby protecting consumers from the more obnoxious methods of debt collection. The act applies mainly to third party debt collectors and not to debt collectors hired by the original creditor.

The FDCPA requires debt collectors to identify themselves at the outset of every communication with a consumer. Debt collectors must notify consumers of their right to dispute the debt and to demand written verification of the debt. If the collector fails to provide this information within 30 days, the debt may become uncollectible. The FDCPA prohibits phone calls at unreasonable hours, ignoring written requests by the consumer to cease communications, repeated calling, communicating with a debtor who has filed a bankruptcy petition and communicating with consumers at their places of employment. Of course, one of the most effective ways to curtail or eliminate harassment from a debt collector is to retain a lawyer. The FDCPA prohibits debt collectors from contacting consumers who are represented by lawyers. Perhaps the most important prohibition in the FDCPA is the ban on misrepresentation and deception.

Violations of the FDCPA should be reported immediately to the Federal Trade Commission, the federal agency that administers the FDCPA. If harassment continues, consultation with a lawyer who deals with consumer debt may be in order. A knowledgeable attorney can provide useful advice on dealing with creditors and whether bankruptcy is a viable option.

Source: FindLaw, "How to Stop Debt Collector Harassment," accessed on June 24, 2017

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