Creditor harassment limitations: What a creditor cannot do

At a certain point, if you get behind on your debts, the financial institution you owe will sell your debt to a debt collector. These debt collectors buy your debt at a bargain price in the hope that they will succeed at collecting more money than they paid for it.

If you're being harassed by debt collectors, you know just how aggressive and aggravating they can be. Also, you're probably wondering what kind of limitations the law imposes on debt collectors. In other words, what are debt collectors not allowed to do?

Limits on debt collection activities

Here is a list of certain things that debt collectors cannot do under federal law:

  • Using abusive, deceptive or unfair tactics to collect debts.
  • Harassing people with profane language, threats of violence or repeatedly calling people to create an annoyance.
  • Making misleading or false statements, such as lying about debt amounts, pretending to represent a credit reporting agency or claiming to be a representative from the government or falsely claiming to be a lawyer.
  • Threatening that the borrower will be arrested for failing to pay debts.
  • Threatening to garnish the borrower's wages.
  • Threatening to liquidate the borrower's property.
  • Unfairly adding interest and fees that were not permitted under the original borrowing agreement.

Filing for bankruptcy to stop creditor harassment

As a part of filing for bankruptcy, the filer will receive protection through an automatic stay. Once the automatic stay is in effect, creditors and the debt collection agency can no longer call the filer and try to collect on debts owed. The collection agencies must work through the bankruptcy court in all their future debt collection endeavors and they must accept any decisions rendered by the bankruptcy court with regard to the money owed.

If a debt collection agency ignores an automatic stay and continues to harass a borrower, the agency could find itself facing serious and extensive legal consequences.

Are you being harassed by creditors?

The more you know about bankruptcy law as a creditor, the better you'll be able to protect yourself from credit harassment. Make sure to fully understand your legal rights and use whatever legal avenues are available to stop creditor harassment in its tracks.

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