The recent recession and struggling job market have caused thousands of Maryland residents to fall behind on their credit card, mortgage or other recurring debts. In fact, according to U.S. Bankruptcy court statistics, over 26,000 individuals decided to file for bankruptcy protection from Sept. 2010 to Sept. 2011 with hopes of obtaining a fresh financial start.
Increased Collections Efforts and Consumer Complaints
Businesses and other agencies ramp up collection efforts when a significant number of their accounts receivables are past-due. Their collectors will often try to negotiate payment plans to get consumers to repay their debts, but occasionally they take their efforts too far.
The Fair Debt Collection Practices Act protects consumers against threatening or harassing collection efforts, but unfortunately many people are unaware of what their rights are. For example, collectors are prohibited from:
- Using threats of violence or harm
- Repeatedly using the phone to annoy or harass
- Misrepresenting who they are, what their position is and who they work for
- Falsely claiming that a consumer has committed a crime
In 2011, however, many collectors violated these rules, which caused consumers to file a record number of complaints against the debt-collection industry. According to the Wall Street Journal, the Federal Trade Commission received over 164,000 complaints as of Dec. 8, 2011, far exceeding the 140,000 the FTC received in 2010.
Stop Debt Collection Efforts
The FTC's website indicates that it only uses complaints to detect larger patterns of wrong-doing, but it will not resolve individual consumer complaints. Therefore, debt collectors are not prevented from continuing their collection efforts even after you inform the FTC of their activities.
Filing for bankruptcy, however, will put an immediate stop to all collections activities because an "automatic stay" is put into effect as soon as your petition is filed. Creditors and collectors face severe penalties if the stay is violated. As a result, individuals and their families receive instant relief with reduced stress knowing they can finally sit down to an uninterrupted family dinner.
Anyone struggling with their finances or being harassed by creditors might benefit from filing for Chapter 7 or Chapter 13 bankruptcy. Speak with an experienced bankruptcy lawyer today to discuss your rights and options for a better financial outlook.