The law protects you from harassment and provides a means of discharging your credit card debts.
If you’ve ended up with a significant amount of credit card debt, you may despair of ever being able to pay it off. Even if you could make the minimum payment every month, the balance will take years to repay. Meanwhile, if you miss enough payments the credit card company will probably sell your debt to a collection agency that will begin ruthlessly harassing you for repayment at an inflated interest rate. Fortunately, you do not have to play the passive victim in all this. The law does offer you significant protections and options to escape credit card debt and get your finances back on track. Here are 4 things you need to know about these legal protections and options.
Many Debt Collectors Use Illegal Tactics
Debt collectors are paid on commission and therefore highly motivated to convince you to pay up by any means necessary. However, the Fair Debt Collection Practices Act limits the tactics they may use by outlining what is considered unethical and illegal behavior by debt collectors. If your debt collectors are calling you late at night, lying about their identities, threatening to have you imprisoned for non-payment, or calling you so often it amounts to harassment, they are in violation of the law and you can potentially have grounds for a lawsuit against them.
You Can Discharge Your Debts Completely in Chapter 7 Bankruptcy
For individuals who meet certain income requirements, Chapter 7 bankruptcy offers a means of completely eliminating all kinds of unsecured debts, including credit card debts. If you qualify for Chapter 7, you can typically keep you home, vehicle, and other exempt property. Ask a bankruptcy attorney to help you determine if you qualify.
You Can Restructure Your Debts in Chapter 13 Bankruptcy
For individuals who may have too much income and/or assets to qualify for Chapter 7 bankruptcy, Chapter 13 bankruptcy offers a good alternative. This type of bankruptcy allows for a judge to consolidate your debts into a single interest- and penalty-free repayment plan. You will make payments for three to five years, at which point any remaining portion of your unsecured debts (including credit card debts) will typically be discharged. You will get to keep all of your property in Chapter 13.
Debt Collectors Can’t Contact You Once You Hire an Attorney
Another important thing to realize is that once you hire an attorney to represent you and notify your debt collectors of this fact, all contact between you and the debt collectors will cease. They will only be able to reach you through your attorney, so you can enjoy the process of recovering from overwhelming credit card debt through bankruptcy in peace.
