Should I Stop Paying Creditors If I’m Going to File for Bankruptcy?

Woman looking through bills. OlsenDaines, serving Oregon and Washington explains if you should stop paying creditors if you're going to file for bankruptcy.

If you’re choosing to file for bankruptcy, and you’re current on your debts, you may be asking yourself if you should stop paying creditors now.

Automatic Stay

The short answer is, no you shouldn’t stop paying creditors until you’ve officially filed. When you file for bankruptcy, the court will order an automatic stay which will prohibit lenders from making harassing collection calls, sending threatening letters, and trying to file lawsuits against you. But until then, they can continue to harass you so don’t be surprised if you suddenly stop making payments.

In most cases, the automatic stay remains in effect until your bankruptcy case is concluded. Keep in mind, it won’t stop every debt collector. Automatic stay orders will not halt child support, loans against your pension, or back taxes. And if you filed for bankruptcy in the previous year, the order will expire after 30 days.

  • Auto Loans: if you stop making payment on your auto loan, at some point the creditor will attempt to repossess your vehicle. If you want to keep the vehicle, you may want to continue making payments so you don’t run the risk of getting it repossessed.
  • Credit Cards: in most cases, people are fine not making their credit card payments, but you will likely be subjected to collection calls until you file for bankruptcy. If you just used a card before you realized you were going to file, you may want to continue to make payments. We recommend consulting with a bankruptcy attorney.
  • Home Loans: as with auto loans, if you stop making your mortgage payments, at some point the creditor will attempt to foreclose the home. If you want to keep it, you may want to continue making your monthly payments. Every case is different.

Bank Setoffs

If you’ve taken out loans through your bank or credit union and you’ve stopped making payments, they can institute a setoff. This allows them to withdraw money from one of your accounts to another to cover the loan payment. You may want to move your money around before missing a debt payment.

Experienced Bankruptcy Attorneys

Filing for bankruptcy can help you “start fresh” if you’re facing mounting debt and pressure from creditors. However, there are many missteps you should avoid in the months and weeks leading up to filing.

To ensure you reach your financial goals, it’s best to work with an experienced bankruptcy attorney. OlsenDaines has vast experience with bankruptcy. In fact, we’re the top bankruptcy filer in Oregon. We’ll help you navigate the process and get your life back on track. To schedule your free initial consultation, contact us today!

Can A Debt Collector Message Me on Facebook?

Young couple stressed over bills and debt. OlsenDaines serving Oregon and Washington talks about if debt collectors can contact you through Facebook.

Debt collectors do everything they possibly can to try to collect a debt. A Federal Law called the Fair Debt Collection Practices ACT (FDCPA) details what a debt collector can and cannot do. Changes are made to the FDCPA from time to time as a result of changes in the way people communicate. Unfortunately, the rights of consumers to not be harassed are not a part of the updated laws. In fact, it appears that the new rules make it easier for creditor harassment.

In 2021, changes will be made specifically allowing debt collectors to try to collect from a person by sending unwanted texts and communicating via a private message on Facebook, Instagram, or other social media. This means that you can be viewing photos of your friend’s vacation and at the same time get a message demanding payment on a past-due debt. Viewing your social media pages should not be a time to see harassing collection efforts, but our government disagrees. The new rules pretend to give consumers the right to stop the harassment, but in doing so the government is extending the type of communication that can happen unless a consumer follows a specific method to request the communication stop. It gets even worse – the new rules limit phone calls to one call per day, but no limits are put on the number of texts and messages that can be sent. This may open the door for a depth of harassment that we have never seen before.

You can read the full notice here: https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-issues-final-rule-implement-fair-debt-collection-practices-act/. If you are being harassed by debt collectors, call our office at 1-855-GET-HELP (855-438-4957) to set a free consultation with an experienced attorney.

Can Creditors Publish My Name to Embarrass Me?

As bankruptcy attorneys, we get a lot of calls from people who are being harassed by creditors. In many cases, these individuals are extremely frustrated. It seems to them that the tactics that are being utilized are not reasonable or fair. Here at OlsenDaines, we apply a simple rule that is almost always on the money when it comes to creditor harassment: If it seems to you like it should be illegal, it probably is, and there are legal steps that you can take to bring the harassment to a screeching halt.

 

Fair Debt Collection Practices Act

 

Back in September of 1977 a piece of legislation was enacted as a response to very aggressive tactics that were often being utilized by collection agencies. It is called the Fair Debt Collection Practices Act (FDCPA). This measure spells out the parameters that people who work for collection agencies must follow when they are attempting to collect debts. To go directly to the question that serves as the title of this blog post, under a provision contained within the FDCPA, collection agencies are not allowed to publish your name as a delinquent debtor in an effort to embarrass you. (One caveat would be that in some jurisdictions, collection agencies that collect outstanding child support payments are allowed to publish names without violating this law.)

 

There are many other provisions contained within this act that protect consumers. If the collector is aware of the fact that you are not allowed to take collection calls at work, they cannot call you while you are on the job. There are also restrictions with regard to the hours during which they are allowed to contact you. Under typical circumstances, their window is confined to the hours between eight a.m. and nine p.m. Plus, they cannot contact you at all if they are aware of the fact that you have legal representation. These are a handful of the restrictions, but there are a number of others.

 

Schedule a Free Debt Relief Consultation Today

 

You do not have to sit idly by while aggressive, demeaning collectors constantly invade your life. Many people fall into unmanageable debt as a result of circumstances that are out of their control, and regardless of the underlying causes, you have legal recourse. If you would like to discuss your options with a Portland, Oregon bankruptcy attorney, we would be more than glad to assist you. We provide free consultations to people in Portland and a number of other cities scattered throughout the state of Oregon. To set up an appointment, send us a brief message through our contact page and we will take care of the rest.

 

Can a Collection Agency Call Me at Work?

There are few things more annoying than unbridled collection attempts from very rude and aggressive collectiong companies. In far too many cases they cross over the line, and there is indeed a line in place. It was drawn through the passage of the Fair Debt Collection Practices Act (FDCPA). This piece of legislation spells out the rules with regard to fair debt collection practices, and you should understand your rights if you are under siege by collection agencies.

First of all, to address the specific question that serves as the title of this blog post, collection agents may not contact you at your place of employment IF they have been made aware of the fact that you are not allowed to receive these calls. You must tell them to not call you at work.  You also have rights when it comes to the times of day that collection agencies are allowed to contact you. Generally speaking, they can only try to get in touch with you between 8:00 a.m. and 9:00 o’clock in the evening. However, if you work unusual hours and they know it, they would be required to adjust their actions accordingly.

Collection agencies are not allowed to threaten you in any way, and they cannot publish your name on any type of lists that are meant to embarrass you or diminish your reputation.   Additionally, collection companies are not allowed to call you repeatedly, and they are breaking the law if they use foul or abusive language when they are speaking with you.

These are all important and useful provisions for debtors, but there is one section of the law that may be the most valuable of all. If you send a collection agency a cease and desist letter demanding that they stop contacting you, they are required to comply.  The only contact they can make after that time is to serve you with a lawsuit.

Lastly, if they know you have hired an attorney, they can only discuss your debt with the attorney and the must leave you alone.

Retain a Bankruptcy Attorney!

As you can see, there are many restrictions placed on collection agencies by the federal government. Again, if you have a lawyer representing you, collectors will be required to contact your attorney, so you wouldn’t have to deal with them at all.  In addition, when they know you have an attorney, they know you have the ability to sue them for violating the FACPA,  We have offices in many different cities in Oregon, including Coos Bay, Klamath Falls, Bend, and Portland, and we would be glad to provide you with a free initial consultation. You can set the wheels in motion if you call us right now at 800-682-9568.

Prevent Collection Calls Before They Happen

There are few things more annoying and disconcerting than collection calls from aggressive credit card companies or debt collection agencies. As a bankruptcy law firm that provides debt counseling, we often hear stories from our clients about the tactics that are utilized, and many of them are actually illegal. Before we get into the things that you can do to protect yourself if you are being overwhelmed by collection calls, let’s take a look at some “rules to live by” that you may want to utilize to steer clear of problems with creditors.

Monitor Your Credit Report

You should always have a firm understanding of your current standing in the eyes of the credit reporting agencies. If you understand how credit scores are calculated and you know where you stand at all times, you are more likely to develop sound habits when it comes to credit utilization. There are a number of different websites on the Internet that provide credit scores or credit reports, and some of them are free. In fact, the major credit bureaus are required to provide a free credit report to anyone who requests one every calendar year. Plus, many credit cards now offer free credit scores to cardholders.

When you get your score, you can see the factors that contribute to the calculation. This knowledge can help you shape your credit usage. The length of time you have had credit is one factor, and your credit utilization ratio is an important determinant. Of course, timely payments are very important, and there is another piece of information that the bureaus use that catches many individuals by surprise. People with good credit are barraged with offers of additional lines of credit from every direction. It can seem as though you have nothing to lose if you apply for a credit card because you will get free shipping on an item, or a $50 credit on a plane fare purchase, or 6-months no interest or some other benefit. In fact, your credit score takes a hit every time you apply for an additional line of credit, even if you are approved. And your credit score will be lower if you have too many open cards even with zero balances.

Know Your Rights

If you stay abreast of your credit standing and you live within your means, you should be able to keep your credit card debt at a manageable level. Sometimes people make financial mistakes. Sometimes people who have very sound financial habits end up with overwhelming credit card balances due to circumstances that are out of their control, like medical expenses or unforeseeable living expenses.

Fortunately, you have rights under The Fair Debt Collection Practices Act (FDCPA) that you can exercise if you are receiving collection calls. There are legal guidelines that collectors must abide by with regard to the things that they do and say, and harassment is illegal. You can sue a collector who is crossing the line, and creditor harassment is an area of specialization for our firm. For example, under this law, you can send the collectors a letter letting them to never contact you again or to only contact your attorney, and they are required to comply. The only exception is contacting you to give you a summons for a law suit.

 

Say Goodbye to FDCPA

Supreme Court Justice Neil Gorsuch issued his first opinion this week.  We learned a lot from this opinion.  Unfortunately, the most important thing we learned was that he can come to any conclusion he wants – that makes him a perfect fit for the Supreme Court.  This opinion is being heralded as well written and Gorsuch is praised for his “Melodic Phrasing”  (ABC) and his “Writing Flair” (FOX).  What was lost in all the praise was the simple fact that with one opinion, Justice Gorsuch eliminated the whole of the FDCPA (Fair Debt Collection Practices Act – 15 USC 1692).

The primary requirement when a judge is interpreting a law is to give the law some meaning.   What the Court ruled was that to avoid the FDCPA completely, all a debt collector has to do is buy the debt instead of collect the debt for another.  Nothing in the opinion states that a collector can not have a sell back provision and sell a debt back to the original lender if the collector is unable to collect.

Bottom line:  A lender and a debt collector can now write their agreement in such a way as to completely avoid the FDCPA.  Justice Gorsuch has now given the FDCPA no meaning.  For the 50% of adults in America who have debts:  You just lost your right to not be harassed.

Discuss Unfair Debt Collection With a Bankruptcy Lawyer

If you are getting phone calls from collection agencies that are getting out of hand in one way or another, you may want to discuss your situation with a bankruptcy lawyer. We serve clients in Salem, Roseburg, Medford, Klamath Falls, and numerous other cities in Oregon, and we also have offices in Washington. Many of our clients reach out to us because they simply cannot tolerate the nature of the collection calls that they are receiving, and we can always provide solutions.

The Fair Debt Collection Practices Act (FDCPA) spells out guidelines that collection agencies must abide by when they contact debtors. We should emphasize the fact that it is not applicable when a creditor is contacting you directly. The FDCPA protections do not apply until and unless the debts are handed over to a collection agency.

One of the provisions contained within the Fair Debt Collection Practices Act will provide you with immediate relief if you engage our firm to represent you. Once the collection agency is aware of the fact that you have legal representation, they cannot contact you directly; they would have to communicate with us. This is a very efficient way to get the collectors off your back as we work with you to develop a debt relief strategy.

Bankruptcy is going to be the right choice for many people who are struggling with a significant level of unmanageable debt. After you engage our services and the collection calls come to a halt, you could potentially file for bankruptcy. If you decide to go this route, you would get an automatic stay. This would temporarily stop most collection efforts, and this could apply to your original creditors as well as the collection agencies.

You would typically choose between a Chapter 7 and a Chapter 13. With a Chapter 7 bankruptcy, unsecured debts can be completely discharged, and you can go forward with a fresh start. A Chapter 13 bankruptcy is a reorganization that allows you to use your disposable income to pay back your debts, or a portion of your debts, over time. The form of bankruptcy that is right for you will depend upon the circumstances. In either event, the collection calls will cease, and you will be able to move on with your life free of debt collector harassment.

There is no reason to accept abuse from a collection agency representative who is stepping out of bounds. Help is just a phone call away, and our firm offers free case evaluations for people in Vancouver and Tacoma, Washington and just about everywhere in the state of Oregon. If you would like to reach out, you can give us a call right now at 1-800-682-9568.

How Can I Stop Collector Harassment?

If you are the victim of collection agency harassment, you do not have to sit idly by accepting whatever they dish out. You have certain rights, and you should certainly exercise them if you are being encroached upon in an overly aggressive manner. The Fair Debt Collection Practices Act went into effect in 1977, and it spells out very specific guidelines that debt collectors are legally compelled to abide by. You should certainly understand all the provisions so that you can assert your rights if they are being violated.

FDCPA Guidelines

The collectors are not allowed to call you whenever they feel like doing so. Generally speaking, they cannot legally contact you before eight a.m. or after nine p.m., but there can be other provisions. For example, if you work the graveyard shift, they may be out of compliance if they contact you during the daytime. They also must refrain from repetitive calls that are nothing than intentional acts of harassment.

Creditors are not allowed to call you at your place of employment if they have been made aware of the fact that you are not permitted to receive calls while you are on the clock. They are also prohibited from contacting you directly if you have obtained legal counsel, and this is one of the many benefits that you would gain if you were to retain a bankruptcy attorney to help you manage your debt. The collectors are not allowed to threaten you in any way, and they are violating the law if they utilize profane language during their interactions with you.

Plus, we should point out the fact that you can make a creditor stop calling if you send them a cease-and-desist letter. If they continue to try to communicate with you after you have sent this notice, they are violating the FDCPA. We represent clients who have been victims of collector harassment, and you can recoup damages and receive as much as $1000 in statutory damages if you file a lawsuit. The guilty party would be required to pay your legal expenses as well.

You should certainly sit down and have a meaningful conversation with a licensed bankruptcy attorney if you are experiencing financial difficulties. We have assisted thousands of families over the last few decades, and we would be more than glad to add you to the list. Our firm has offices in virtually every metropolitan area in the state of Oregon, and we also have locations in Vancouver, Tri-Cities, and Tacoma, Washington. If you would like to schedule a free case evaluation, fill out the contact form on this website and we will get back in touch with you to arrange the consultation.