If you are filing for bankruptcy, it is important to know the different laws that are in place to help you. One of those is The Fair Debt Collection Practice Act, or FDCPA. The other is that you may not end up having all of your debts discharged in bankruptcy because of how the laws work regarding Chapter 7 liquidation (if you choose that form of bankruptcy).
First, looking at the FDCPA, you should know that it details what debt collectors may or may not do when they attempt to collect a debt. The act does not cover any kind of commercial debts, but personal debts are covered.
Collections are allowed, but agents have to be reasonable
Collecting money is allowed, but the FDCPA does restrict creditors so that they aren’t harassing people. You are allowed to ask a debt collector to send you paperwork covering information about a debt. You can also ask them not to call you at work. They should not be calling during times restricted in the act or by your local government.
The FDCPA states that debt collectors cannot oppress, abuse or harass consumers or anyone else they get into touch with regarding a debt. This includes restricting them from:
- Threatening you with violence
- Using profane or obscene language
- Publishing information about people who owe on debts they’re trying to collect
- Making repetitious phone calls to annoy or harass someone
Keep these in mind if collectors are calling, so you can report any who aren’t following the law.
Most, but not all debts are dischargeable
Another thing to know is that not all of your debts can be discharged in bankruptcy. The federal government has set up Chapter 7 bankruptcy to liquidate your assets, although because of allowed exemptions usually none of your assets are liquidated. Your personal liability on a secured debt will be discharged, but the lien will remain against the secured property if debt is not paid. Also, debts such as child support or recent taxes are unlikely to be dismissed by the court, even if you seek bankruptcy.
Know your rights if you intend to file for bankruptcy. Once you’re familiar with how bankruptcy works, you may want to speak to your attorney about getting started.