FAQ Bankruptcy

Will filing for bankruptcy stop harassing phone calls from bill collectors?

Will filing for bankruptcy stop harassing phone calls from bill collectors?

When you file either kind of bankruptcy, something called an "automatic stay" goes into effect. The automatic stay prohibits virtually all creditors from taking any action to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections.

Can a collection agency add interest to my debt?

Yes. The FDCPA allows a collector to add interest if your original agreement calls for the addition of interest during collection proceedings or the addition of such interest is allowed under state law. Every state authorizes the collection of such interest.

A collection agency sued me and won. What collection measures can it now take against me?

Before obtaining a court judgment, a bill collector generally has only one way of getting paid: demanding payment. This is done with calls and letters. However, once the collector (or creditor) sues you and gets a judgment, the law allows it to take further steps to collect the debt. If you have a job, the collector may try to garnish up to 25% of your net wages. The collector may also try to seize bank or other deposit accounts you have. If you own real property, the collector may record a lien against it, which will have to be paid when you sell or refinance your property. Even if you're not currently working or have no property, the judgment won't disappear. Depending on the state, court judgments can last up to 20 years and, in many states, can be renewed for years beyond that.

Copyright 2005 Nolo

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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