The Fair Debt Collection Practices Act aims to protect consumers from abusive practices on the part of debt collectors. Unfortunately, despite an array of laws aimed at protecting debtors and despite government agencies like the Consumer Financial Protection Bureau trying to stop dishonest debt collection tactics, debt collectors still continue to be unethical. Those who are in debt and who are facing aggressive collection efforts may have legal remedies when debt collectors violate the law, but it can take time and money to stop the abusive debt collections practices and to hold the debt collectors accountable and make them pay for their actions.
One way to stop debt collectors in a timely manner is to file for bankruptcy protection. When you file for bankruptcy, an automatic stay goes into effect and collectors have to stop all tactics aimed at recovering funds from you. This includes halting foreclosure or repossession procedures, and putting a stop to wage garnishment actions. Once you go through the bankruptcy process, debt collectors will no longer be able to collect from you and should leave you alone.
Abusive debt Collection Practices are Damaging to Debtors
Filing for bankruptcy and ending collection efforts can significantly reduce the stress levels you face, as well as helping you to get back onto firmer financial footing as you resolve the problems caused by your debt once-and-for all.
One recent case of egregious behavior on the part of a debt collection company illustrates the lengths that some lenders will go to in order to try to get their money from borrowers. Consumers who are in debt need to realize that debt collectors are often unscrupulous and will stop at nothing to try to get paid- which is why the option to file for bankruptcy is so important for consumers to be able to put an end to the collection efforts.
The egregious behavior was conducted by an auto lender and was reported on by Consumerist. The auto lender was targeting military members and specialized in lending money to active duty military members as well as former military members. The money was lent to buy used cars in two dozen states. The problem is, the contract with the lender had fine print allowing the lender to report unpaid debts to commanding officers of service members.
Service members have special debt repayment obligations, and the auto lender was able to collect millions of dollars from service members who had defaulted on loans by making threats that they would tell commanding officers about debts not being paid. The collectors also threatened the borrowers they'd become ineligible for promotions, could face demotion, could be discharged, could be reassigned, or could lose their security clearance.
The auto lender was ultimately forced to pay $3.28 million in refunds and fines because of its improper behaviors. However, its actions are illustrative of some of the unlawful and aggressive things debt collectors do to consumers.
If you are being harassed by debt collectors or are worried about repeated efforts to collect debts you cannot pay, you should explore your options for resolving the debt permanently through bankruptcy.