When you’re in debt and dealing with bankruptcy, creditors who call, send letters, and email add burdensome stress to your day. It’s important to understand what Chapter 7 bankruptcy can do to reduce this kind of repeated contact.
An experienced bankruptcy attorney can help to enforce the provisions of the law that limit contact from creditors, whether your debts are discharged by bankruptcy, active, or in collections. An attorney acts as your liaison to the creditor or bankruptcy court. Read on to understand the legal limits of debt collections.
Your Protections Against Creditor Harassment
Consumer and bankruptcy laws limit the amount of pressure that creditors can put on individuals who owe debts.
- One law that applies to everyone, regardless of bankruptcy status, is called the Fair Debt Collection Practices Act (FDCPA). It puts guardrails on the way that creditors can contact you about debts, the appropriate hours for collections calls, and the identities of debt collectors. The limitations apply to third-party collectors who are hired by creditors to collect consumer debts or parties who purchase debt and try to collect on it. (It doesn’t apply to situations like landlords seeking rent.)
- The FDCPA applies to collection agencies seeking repayment of debts on behalf of creditors; it does not apply to creditors who are seeking repayment directly from clients or customers.
- Some of the limits put on collections through third-party agencies include no impersonation of police officers or other officials, no verbal abuse, and no threats of jail time for nonpayment of the debt.
- Debt collectors cannot tell third parties about your debt.
- If you file for bankruptcy, whether Chapter 7 or Chapter 13, an automatic stay is triggered, stopping most debt collection activities, such as lawsuits, wage garnishments, and collection calls or messages. However, some debts are not discharged by bankruptcy, including most student loans, child support, and court-ordered payments.
- A discharge injunction is entered after your bankruptcy is discharged. That forbids creditors and collectors from all attempts to collect payments on debt that was discharged through bankruptcy.
Harassment after Chapter 7 Bankruptcy
Creditors who continue to call or threaten debtors after their debts have been discharged by Chapter 7 liquidation bankruptcy can be found liable for harassment. Take note of steps that must be followed to formally notify the creditor of their unlawful behavior and your intention to seek legal sanctions against them.
Additional Protections Provided by South Carolina Law
The state’s Consumer Protection Code requires the original creditor and any third-party debt collectors to follow rules to avoid harassment. These include most of the same protections of the FDCPA (such as limiting the hours that debt collectors can call, not misrepresenting the penalties for unpaid debts—like threatening jail time, and not using profane language). The key difference is that South Carolina’s law expands these rules to include primary creditors as well as to debt collection agencies.
Steps to Take Against Creditors Who Harass
To take action against unscrupulous debt collections, you must have proof. If a creditor or debt collector is harassing you, take these steps:
- Save calls, messages, texts, and letters received.
- Notify the collector in writing that the debt was discharged through bankruptcy.
- Send a cease-and-desist letter telling the creditor or collector to stop contacting you.
- Contact the South Carolina Department of Consumer Affairs and the federal Consumer Financial Protection Bureau about the violations.
- Talk to a bankruptcy attorney to get the discharge injunction enforced.
- If the harassment doesn’t stop immediately, a civil lawsuit may be filed seeking court sanctions and damages.
Finding an Informed Ally to Help With Creditors
When you’re struggling with debt and getting through bankruptcy, it can be difficult to judge whether a creditor or collection agency is acting inappropriately. Fortunately, Lam Law Firm can be a resource for South Carolina residents. Understanding your rights and having legal representation can reduce the stress of dealing with creditors. Call for a consultation today.
