What are Debtor’s Rights Against Creditors Before Bankruptcy?

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Debtor’s Rights Against Creditors Before Bankruptcy

If you are currently facing a significant amount of debt and have not been able to keep up with payments, you have probably started to receive calls from collection agencies attempting to collect on a debt.  You have probably noticed that these creditors are generally aggressive in their collection tactics and the calls and snail mail are endless. As a debtor you need to be aware that you do have debtor’s rights against these creditors before you file bankruptcy.

Third-party debt collection agencies are regulated by the Fair Debt Collection Practices Act or the FDCPA. The act is a federal law that limits the collection practices of third-party debt collectors who are attempting to collect debts on behalf of another person or entity.

Limits on Creditor’s Collection Practices

Third-party debt collectors are prohibited from attempting to collect a debt during inconvenient times, meaning, they should not call before 8:00 a.m. or after 9:00 p.m. unless the collector and debtor have negotiated to do so. Although collectors can reach out to debtors at their home or office, if a debtor tells a bill collector, verbally or in writing, to stop calling his place of employment, the collector must refrain from calling his place of employment. Further, a debtor may request (in writing) for a collector to stop calling their home. If a debtor intends to do this, it would be best to send this written request by certified mail. If a creditor calls a debtor regarding a debt, the creditor must, within 5 days of contacting the debtor, send a written validation notice. This notice must include the name of the creditor the debt is owed to, how much the debtor owes, and what to do if the debtor believes that the debt is not theirs. Creditors are prohibited from threatening bodily harm or arrest if the debt is not paid and they also cannot lie about the debt or use obscene or profane language. Collectors also cannot threaten to sue a debtor unless they truly intend to file suit.

What to Do?

If you believe a third-party collector has violated any of the rules listed above, you must document any and all correspondence with these collectors. Debtors are then able to bring a case against the third-party collector if the violations have happened within the year before you file suit against them. Keep in mind that this doesn’t mean you do not owe this debt.

If you have questions about creditors and think bankruptcy might be right for you, please call our office for a free consultation, 913-422-0909.  We have three convenient locations in the Kansas City are, Olathe, Northland and Independence.

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