Credit card debt can be a scary thing, especially when it spirals out of control. According to the Federal Reserve, since the Great Recession total household debt has decreased roughly 11 percent since its peak. However, the reduction in debt has been attributed to: (1) declining consumer use of, and demand for, credit; (2) declining lender supply of credit; and (3) an increasing amount of nonperforming debt written off by lenders as a result of the sudden increase in default rates. Thus, the overall numbers showing a reduction of debt may not actually reflect a healthy economy. In fact, a recent study by NerdWallet found that the average household credit card debt is $15,185-more than a year’s salary at minimum wage. Worse still, with unemployment numbers higher than they’ve been in a decade, paying off that debt on time is not always an option. And that’s when the phone starts ringing.
When the original creditor has not received payment for a certain amount of months, they sell the debt to a debt collection agency. The bill collectors work on commission and are highly motived to collect on your debt. This can lead to some pretty unpleasant and disruptive behavior. They might call at all hours and even threaten you with legal action. But there are limits to what the collectors may say and do. The federal Fair Debt Collection Practices Act prohibits bill collectors from using certain debt collection methods that are considered as harassment. For example, they cannot call you before 8 am or after 9 pm They also cannot threaten to sue you, unless they really intend to. Even with these limits in place, the whole experience can be intimidating and leave you feeling overwhelmed and dreading the next phone call.
What do you do when the calls will not stop? One thing you can do is to write a letter telling them to stop. Once they receive the letter they cannot communicate with you again, except to say that communication will end or to notify you that they are taking a specific action. This will stop the calls, but the debt remains. The collector may still sue for the amount of the debt they are owed. If they do, and win, they will now have a judgment to collect and the nightmare starts all over again.
To best way to get the calls to stop for good is to take back control of your financial health. If you are struggling with overwhelming debt contact a bankruptcy attorney to discuss what your options are. Filing a bankruptcy petition stops the calls and your attorney can help you determine if your best option is a discharge in Chapter 7, or a restructuring of the payments in Chapter 11. Even if you decide that filing for bankruptcy is not the way to go, your attorney can help you take the necessary steps to get your debt paid down and your financial condition back to stable.
