Have you been behind on your payments and don’t know how to face your debt collectors? Individuals who are delinquent on their accounts know how stressful it can be to face multiple collection activities and even creditor harassment. Worse, you may hear from a third-party debt collection and even a debt collection company instead of the original creditor which makes negotiations more difficult. This is where debt attorneys or bankruptcy attorneys come in. But which one should you consult with? Read to learn more about how you can get out of this situation.
Understanding Debt Collection
Keep in mind that although your creditors have the right to go after your unpaid debts, there is a legal process that they should follow to protect the rights of both parties. When a debtor is delinquent on his or her account, the original creditor will attempt to collect the debt on its own. If your lender decides to get a third party collector or sell the debt to a debt collection law firm, then state rules and regulations dictate that you should be informed of the changes through a legal document sent to you. A letter will usually outline the creditor’s decision to retain a collection company or law firm and their demands for payment. Normally, you are given 30 days to either dispute the debt or otherwise face a potential civil lawsuit for failing to pay back your dues.
How Debt Lawyers Help
A debt attorney can help consumers like you who are struggling with debt. They will be the one communicating with the debt collectors and representing you in cases to protect against unfair credit practices. A debt lawyer also negotiates with your creditor and handles lawsuits from your credit card companies. Debtors grant debt attorneys the legal authority to act for them until a debt settlement has been reached. When you are facing a debt collection lawsuit, hiring a debt attorney ensures you can respond to the legal complaint within the statute of limitations and avoid a default judgment in which the court intervenes to collect on your judgment.
There are three ways in which debt settlement lawyers protect a borrower: responding to the complaint, filing motions, and responding to motions or requests. If the debtor has a legal defense it will be raised by his debt attorney. An example is when there is a bar on debt recovery due to an expired statute of limitation. The legal process ends with a court judgment, which states whether they are in favor of the creditor and how they can proceed with collecting on a debt.
How Bankruptcy Lawyers Help
On the other hand, when your finances are beyond repair and paying back the loan seems impossible, it is better to speak with a bankruptcy attorney instead. Debt collection harassment is not uncommon among borrowers who are behind on payments. But the Fair Debt Collection Practices Act (FDCPA) specifically outlines your rights and your collector’s rights.
To know whether debt collection is already harassment, check it against your collectors’ legal rights. They are legally able to:
- Demand you to pay off
- Stop any business with you
- Report a loan default to one of the credit bureaus/credit reporting agencies
- Seize your property or garnish wages through a court action
They are not allowed to do any manipulative tricks or misrepresent your debt amount. You shouldn’t also suffer from too many calls, threats, aggression, obscene language, false threats of legal arrest, and sudden repossession of your car, house, or property. By working with a bankruptcy lawyer, you can maximize protection against these illegal collection activities through the automatic stay order. The automatic stay is immediately released by the court as soon as you file bankruptcy (Chapter 7 or 13). This order essentially prevents debt collectors from making any collection activity or lawsuit against you.
Get Immediate Protection When You File Bankruptcy
You don’t have to keep hiding from your debt collectors. If you are financially in trouble and debt settlement is not an option, bankruptcy is your best route towards a fresh start. Ask our Kentucky bankruptcy lawyers today from Farmer & Wright PLLC to explore your legal options and know more about how a Chapter 7 or Chapter 13 bankruptcy can help you.