In addition to suffering from the stress related to carrying a virtually unmanageable amount of consumer debt, there is the harassment of debt collectors. Consumers seriously contemplating filing for bankruptcy almost always cite the need to stop debt collectors’ harassment as a main component in their decision to go this route.
Bankruptcy, Debt, and Collectors
Collectors are agents of creditors. It is their function to secure payment of outstanding amounts owed. They are persistent, and they have the legal right to contact consumers with outstanding balances repeatedly; moreover, they may use the telephone and also the mail for this purpose. That being said, a consumer who is already anxious about outstanding debts easily interprets the efforts of a debt collector as being harassing.
Making matters worse, a good many consumers have more than simply one outstanding balance, and it is therefore not unheard of to receive phone calls and demand letters from three, five or even more agencies. Consumers who simply cannot see an end to these collection calls and letters find that bankruptcy provides the ultimate debt relief.
Exhausting All Options Prior to Bankruptcy
It is true: debt collectors are hard to deal with; however, it is not always necessary to immediately consider bankruptcy. For example, debt collectors may actually be able to help consumers understand which – if any – hardship assistance provisions they may qualify for. Several creditors offer these kinds of programs to their debtors, and they may allow for an amending of the credit contract or even for an increase in the grace periods, so that consumers have extra time to make payments.
Another way of stopping debt collector harassment is with the help of a financial counselor. This professional offers debtors an education in their rights, such as they are dictated by the Consumer Credit Code, and also provides hands-on help with budgeting. Moreover, the counselor may also speak with debt collectors on the client’s behalf and seek to settle debts.
When All Else Fails
Of course, not all creditors agree to an informal settlement of outstanding consumer debts. In these instances, a debtor may have to take formal steps to enjoy relief from debt collection efforts. First and foremost, a debtor may seek to undergo a formal debt agreement with creditors; if this effort fails, a personal insolvency agreement may yield the aid needed.
Should even this prove to be ineffective in dealing with the consumer debt, bankruptcy is a last and final resort that not only helps consumers with unmanageable debts to get a fresh start, but it also provides legal protection virtually immediately ceasing all debt collector harassment.