Credit Card Debt-Collection Tactics Might Go too Far
It is important to know that there are legal protections against creditor harassment, including bankruptcy.
October 23, 2012
Credit Card Debt-Collection Tactics Might Go too FarTexans who are struggling with credit card debt in these difficult economic times may feel overwhelmed. It is important to know that there are legal protections against harassment by debt collectors and that several options, including filing for bankruptcy, are available to help people get a fresh financial start.
Harassing Collection Calls Can Be Stopped
First, everyday life for people who are plagued by collection calls can become easier. Under the U.S. Fair Debt Collection Practices Act, attorneys and collection agencies are required to stop calling a debtor if the debtor tells them not to call. In Texas, credit card companies are also subject to the same restriction. Debtors who have said they do not want to receive calls can be contacted only in writing.
A certain way to halt collection attempts is to file for bankruptcy. Filing the bankruptcy petition automatically stays, or stops, efforts to collect on that individual's debts, including foreclosure proceedings, phone calls and wage garnishments. A few debts, including support payments ordered by family court, are not subject to this rule, and collection efforts for these debts can continue while the bankruptcy is proceeding.
Credit Card Companies Sometimes Use Shady Tactics
For debtors who are not protected by the bankruptcy option, credit card companies might aggressively try to collect the debt by filing a lawsuit against the individual. However, a number of judges, attorneys and regulators have recently observed that many of these cases are seriously flawed. According to the New York Times, one judge estimated that in 90 percent of the cases he was seeing, the credit card companies did not provide sufficient proof that the debtors actually owed what the companies said they did.
Some credit card companies or debt collection agencies have been submitting incomplete records and erroneous, mass-produced documents. They fail to produce the debtor's original contract and payment history. Witnesses testify to vague generalities rather than the specifics of a particular case. These tactics call to mind those recently used by big banks in abusing the mortgage foreclosure system.
Unfortunately, few debtors have been contesting the faulty lawsuits, probably unaware of their rights and the legal requirements that the creditors fail to fulfill. Many of the lawsuits end in a default judgment against the borrower, which happens when the individual does not attend the scheduled court hearing. If the borrowers don't show up, judges can do nothing to help them, even when the judges see deficiencies in the cases.
The federal Office of the Comptroller of the Currency is now investigating the credit card industry's debt collection practices, and help is available from attorneys with experience in bankruptcy and debt collection cases.
People overburdened by credit card debt need an advocate who can protect them from lenders' potentially fraudulent practices and provide sound legal advice. An attorney who specializes in bankruptcy can help determine whether filing for bankruptcy might be the wisest course and whether a credit card company might be acting without proper legal foundation.
Article provided by Charles R. Nettles, Attorney at Law
Visit us at http://www.cnbankruptcylaw.com