Being behind on your bills is an incredibly stressful experience. All the contact from creditors and collection agencies only makes things worse. While at first this contact might be seen as "friendly reminders," eventually it can turn into creditor harassment, and there are ways you can stop it.
Can a bill collector turn to Facebook and pose as a friend to attempt to collect on a debt?
In the past two entries, this blog has been discussing consumer protections in the debt collection industry. The Consumer Financial Protection Bureau says that fake bill collection scams appear to be on the rise in the United States. Obviously, not all attempts to collect on a debt are fraudulent.
The last entry on this blog focused on a recent warning to Americans from the Consumer Financial Protection Bureau about a recent wave of debt collection scams that have harmed consumers. The CFPB regulates the financial services industry to protect consumers. Many laws exist to protect consumers from unfair debt collection practices and federal law provides consumers with remedies, including protection and debt relief under the Bankruptcy Code.
In the last post, this blog began a discussion of a lawsuit recently filed by a disabled servicemember, who says that a bill collector unlawfully seized funs in a savings account that are exempt from attachment in a wage garnishment or bank account seizure action under federal law. The story left off after the disabled veteran challenged the bank account seizure in court, where the bill collector admitted that the funds were unlawfully seized.
In the last entry, this blog discussed the recent news from the Federal Trade Commission that complaints about aggressive debt collection practices of bill collectors have skyrocketed in recent years. One woman in Ohio is suing a New York creditor, which is discussed in this post. But the issue debt collection tactics that can blindside a person can happen to people from any walk of life.
Despite consumer protection laws, the Federal Trade Commission says that complaints about over-zealous bill collectors have seen a sharp rise in the past four years. The agency says that complaints about debt collectors and creditor harassment have spiked by 73 percent since 2008. Sources claim that the significant jump in complaints over creditor harassment is a sign of a bad economy. The sharp increase in complaints roughly coincides with the economic collapse.
This blog has frequently discussed the idea that a creditor must stop collection activities when a person files for bankruptcy protection. Generally, creditors can only resume debt collection activities with permission of the court after a bankruptcy petition is filed, based upon specified rules that do not allow resumption of collection activities in all cases. One of the basic protections of a bankruptcy petition is that a bankruptcy case can serve to stop creditor harassment while the case is pending in the bankruptcy court.
Any experienced bankruptcy attorney in the country has heard stories from consumers who have been subjected to creditor harassment. From time to time, this blog has recounted stories from the news of the outrageous tactics some bill collectors have used in pursuit of the almighty dollar. Cincinnati bankruptcy attorneys know that consumer laws are in place to protect financially distressed individuals from the outlandish tactics that some creditors use.
Wage garnishment is controlled in each state under state laws. Ohio law allows creditors to garnish wages and bank accounts after the creditor takes certain steps. A creditor must first obtain a judgment on the debt before they can seek wage garnishment. That means the bank, credit card company or other creditor must first sue to collect the debt. Federal law prohibits bill collectors from undertaking certain collection practices that are not fair to consumers.