Ignoring Debt Collection Calls Is Not A Great Idea
Those Annoying, Abusive Creditor Phone Calls….
People who owe money (debtors) and are past due on their payments are eventually faced with a barrage of phone calls from their creditors attempting to collect on the debt.
Frequently these callers, who are often not even the actual creditor, but merely a collections agent, use abusive and illegal tactics to try and extract money from their prey.
You may even be able to sue them under the Fair Debt Collection Practices Act (FDCPA (pdf)) for such violations. But what happens if you just ignore these calls?
That was the question I was recently asked by a potential client, who had been told that the creditor would close their bank account if they ignored them and didn’t pay. The remedies available to creditors vary state by state.
For consumer-type debts (credit cards and the like), in the vast majority of cases a creditor cannot do anything unless and until they obtain a court judgment for the debt that is owed. In order for them to obtain a judgment, they must first file a lawsuit and then prevail at trial (or if you do not respond to the lawsuit, they can win by default).
What Can Creditors Do After Getting a Court Judgment?
Once the judgment is obtained, then the creditor can SEEK to do certain things to collect on the debt. In California this includes: seizing funds in a bank account, garnishing up to 25% of net wages from paychecks, and putting a lien against any real estate owned by the debtor in a given county.
Keep Your Friends Close and Your Enemies Closer?
Filing bankruptcy, of course, will stop the creditor’s ability to collect wherever they are in the above process (even after they’ve started garnishing, etc.).
But getting back to the original question: Should you ignore the creditor’s initial phone calls?
It really depends on a number of different factors. Discussing payment options with them (whether they are realistic or not, or whether you adhere to them or not) will delay them sending the file to their attorney’s office so it does, in most cases, buy you some time before a lawsuit will be filed.
However this does not mean that if you ignore them they will automatically sue you and start that process instead, but you can usually buy more time by communicating rather than not.
Examine All Your Options
Ultimately, however, you need to decide how best to deal with the debt(s) and that should always entail examining your options under bankruptcy. That way, you will know whether it makes sense to file bankruptcy now, later, or perhaps not at all and instead negotiate payments with your creditors or ignore them and see what happens.
Any or all of these can be viable options depending on your circumstances.
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