Bankruptcy and Bill Collectors

If you owe money to credit card companies, medical facilities, old apartment complexes, vehicle lenders or pretty much any other lender, there is a good chance that your account has been turned over to a bill collector.

Some companies have their own bill collection departments, while others outsource bill collection to a collection agency.  Outside collection agencies may be paid a flat amount per account, or they may get to keep a percentage of what they recover.

“Dunning” Tactics by Bill Collectors

Whether the collection agency is an internal collection department or an outside agency, one thing is constant - bill collectors will use tested psychological techniques to intimidate you into paying an overdue account.

For struggling families, collection activities by bill collectors can often seem like harassment.  Many of our clients report that they are being “dunned” by more than one collection agency, meaning that the phone rings all day with calls from collectors demanding money.

Federal and state law allows bill collectors to contact you in an effort to collect money.  Outside collection agencies are subject to a federal law known as the Fair Debt Collection Practices Act which does limit their activities somewhat.

A bankruptcy filing has the most immediate and dramatic effect on bill collectors - it puts an end to them!  In most cases, the minute you file for bankruptcy, all collection activity against you has to come to an immediate stop because of something called the “automatic stay” of bankruptcy.

Lies Told by Bill Collectors

At Clark and Washington we frequently hear outrageous stories from our clients about some of the statements and threats made by bill collectors.  As a general rule, you need to be very careful if you choose to speak with a debt collector over the phone.  Here are some of the misrepresentations and outright lies uttered by bill collectors that our clients have reported to us:

• you can go to jail if you don’t pay this debt (false - there is no debtor’s prison in the United States.  The IRS and State of Florida are generally the only creditors who can legitimately threaten imprisonment)
   
• we are going to send out someone from our office to collect this debt - implying a threat of physical violence (false - bill collectors cannot use violence to collect debts)
   
• give us access to your checking account and we’ll withdraw $25 per month (bad idea - once you give a bill collector access to your checking account, he may very well clear it out and you will have a very hard time proving that you did not give permission
   
• we are going to garnish your wages/take your car/foreclose on your house (false - bill collectors can only garnish your wages or take any other action against your assets if they file suit and get a judgment.  You will have notice of any lawsuit and time to react to it)
   
• we are going to publish your name in the paper as a deadbeat if you don’t pay us (false - the law does not permit this)
   
• bankruptcy wont help you (false - most Floridians are eligible for bankruptcy and in many cases bankruptcy can be the fresh start you have been seeking)

The bottom line here - be very wary about believing anything that a bill collector tells you.  Instead, Clark and Washington invites you to take advantage of a free consultation with one of our experienced lawyers.  Call us today at 813-345-5954 and get some peace of mind knowing that you can get honest answers about debt problems here.

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