Collection calls can make an already difficult situation miserable. They won’t stop calling until to you talk to them, but you don’t know what to say - you don’t want to make promises you can’t keep, and you’re so overwhelmed that you’re not sure there is anything you can pay. If you could just get the calls to stop, you could maybe focus and come up with a plan to get out of your current situation.
As Minnesota bankruptcy attorneys with decades of experience, we understand the situation you’re in and how difficult it can be. The first step is to make the phone calls stop, and the good news is that you have several options.
Work Out a Settlement or Payment Plan
Most collection agents work on a contingency fee basis, meaning that they get a percentage of whatever money they are able to collect. Even if they don’t work on a contingency fee basis, they want “performing” accounts - accounts that are in active repayment. After all, that’s what their clients have hired them to do. As a result, the unrelenting phone calls are focused on getting people to respond and pay their debts.
Many people think that making payment in full is their only option. This is typically not the case - many collection agents will negotiate a settlement for a reduced amount, work with you on a payment plan, or some combination of both. Once you have negotiated an affordable solution, you will find that the phone calls stop. However, understand that the calls will resume if you aren’t able to make payment as agreed, and the calls may be even more aggressive than before.
Request That They Stop Calling You
Believe it or not, you can simply ask that your debt collectors stop calling you and they are required to honor that request. The Fair Debt Collection Practices Act (“FDCPA”)is a federal statute that governs the actions of third-party debt collectors in order to protect the rights of consumers. Under Section 805(c) of the FDCPA, you have the right to demand, in writing, that your debt collectors cease further communication with you. If they continue to contact you, they are subject to statutory penalties laid out in the statute, which could be significant. As a result, most debt collectors take these requests seriously.
However, there are some exceptions - they can still communicate with you in order to inform you of the following:
- That they are terminating further collection efforts.
- That they may pursue certain legal efforts or remedies in order to collect the debt.
In addition, please note that the FDCPA applies only to third-party debt collectors. As such, it does not apply to your creditors. As a result, you can demand that debt collectors stop calling you, but your creditors can continue to harass you.
You will probably need an attorney to pursue a claim for violations of the FDCPA. However, most Minnesota bankruptcy attorneys can help you with this claim, and if you file for bankruptcy, can incorporate your claim into your bankruptcy case.
Hire an Attorney
If you’re overwhelmed with debt and can’t afford to keep up with your bills, hiring an attorney may seem like a step in the wrong direction. However, there are attorneys who have specialized in negotiating with creditors and can use their experience, knowledge of the law, and legal skills to your advantage. They may be able to negotiate a more favorable settlement or payment plan than you were able to on your own. As a result, hiring an attorney may be more of an investment in your financial future than an additional expense.
If you hire an attorney, the first thing they will do is demand that all of your creditors and debt collectors communicate with them directly. Again, the FDCPA requires your debt collectors to comply - Section 805(2) prohibits debt collectors from contacting you once they have been notified that you are represented by legal counsel.
Most attorneys who handle debt negotiation typically also handles bankruptcy cases on behalf of consumers. As a result, getting an attorney involved communicates to creditors and debt collectors that you may be filing for bankruptcy. Bankruptcy costs creditors money and may result in their debts being discharged. Even the unspoken possibility that you may have to file for bankruptcy can make your creditors and debt collectors more inclined to negotiate. If your creditors are contacted by an attorney at a Minnesota bankruptcy law firm, they will know that all options are on the table.
File for Bankruptcy
Filing for bankruptcy is another way to make the phone calls stop. The moment you file for bankruptcy, there is an “automatic stay” that goes into effect. Under the bankruptcy laws, the automatic stay prohibits your creditors from taking further action to collect your debts. This includes calling you or making other attempts to communicate with you. If they continue to contact you, the bankruptcy court may impose monetary sanctions.
Of course, no one should file for bankruptcy just to stop phone calls from creditors and debt collectors. If you can’t keep up with your bills and don’t know what to tell your creditors, the truth of the matter is that bankruptcy may be your best option. An experienced Minnesota bankruptcy attorney can help you determine whether bankruptcy is the right option for you, but can also help deal with your creditors even if you decide not to file for bankruptcy right now.
Contact a Minnesota Bankruptcy Attorney to Discuss Your Options
The attorneys at Kain & Scott have decades of experience in helping Minnesotans overcome financial difficulties. Even if bankruptcy is not the right option for you, we can help you make the phone calls stop and get some breathing room. Call us at 800-551-3292 or contact us online in order to schedule a free consultation with one of our attorneys.