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The Truth About Bankruptcy

We constantly hear of people who have either filed or are thinking of filing bankruptcy and who now want their credit “fixed”. Be aware credit reports cannot be fixed.

Before filing remember this:

Bankruptcy stays on your credit report for 10 years. Often when applying for a job your potential employer may check your credit, and as a result of bankruptcy you may either not get the job or may have to answer extremely embarrassing questions. Lawyers often claim that you can obtain credit after bankruptcy. This may be true but what they do not tell, is that in most cases the interest and fees are extremely high.

Bankruptcy should always be a last resort, after exploring all other avenues available to you.

Fair Debt Collection Act

When you owe money on a credit card or to any other individual or business you are a “debtor”. If you fall behind for any reason a “debt collector” will probably contact you.

What you should know is that in either situation, the Fair Debt Collection Practices Act requires that collectors treat you fairly. This prohibits certain methods of collection but does not erase any debt you may owe.

A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis.

A collector may contact you in person, by mail, telephone, telegram or fax. However, you may not be contacted at inconvenient times or places, such as before 8 am or after 9 pm, unless you agree. Additionally, a debt collector cannot contact you at work if he knows that your employer disapproves of such contacts.

You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector has received this he may not contact you again except to notify you that the debt collector or creditor intends to take some specific action. REMEMBER, sending such a letter does not negate the debt AND the collector or the original creditor can still sue you.

A debt collector must send you a written notice informing you of the amount owed, the name of the creditor and what action to take if you do not owe the money. A collector may not contact you if you send written notice stating you do not owe the money within 30 days of receiving his letter. He may resume collection activity if you are sent proof of the debt, such as a copy of the bill.

Certain types of collection activities are prohibited. Debt collectors may not:

1) Harass, oppress or abuse. Use threats of harm or violence, use obscene language, repeatedly use the phone to annoy you.

2) Make false statements, imply they are attorneys, imply that you have committed a crime or indicate they are sending legal papers when they are not.

3) Use false names or give false information about you to anyone including credit bureaus.

4) Deposit a post dated check prematurely, use deception to make you accept calls or pay for telegrams, take or threaten to take your property unless this can be done legally or contact you by postcard.

This is just a brief overview of the “ Fair Debt Collection Practices Act”, and before taking any action one should have a full understanding of this act. For more information, you may write to Best Sellers, Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580, or call 1-877-FTC-HELP.