Debt Settlement Companies Can Be A Brutal Force
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Debt Settlement Companies: Navigating Challenges and Solutions
Overview
When someone falls significantly behind on their bills, it might feel like they are constantly bombarded with calls demanding payment. Often, a simple explanation of their financial difficulties and a request for advice on how to keep up with payments can appease these callers. Many debt settlement companies are understanding and willing to work with debtors to resolve outstanding debts. However, not all companies are as accommodating. Some resort to intimidation, believing it will prompt faster payments. Despite consumer protection laws designed to curb aggressive practices, some collectors still engage in hostile actions.
Understanding Your Rights
Creditors have the right to contact individuals regarding overdue bills, but they cannot engage in harassment. The law prohibits the use of foul language or persistent calling intended to annoy the debtor into paying. Calling at inappropriate hours, contacting a person's workplace after being instructed not to, or reaching out to friends and family without consent is considered harassment. Threatening or violent calls must not be tolerated. In extreme cases, filing for bankruptcy can halt these calls.
Legal Protections and Bankruptcy
If debt settlement discussions fail and bankruptcy is filed, all collection activities by creditors or their agents must cease, as mandated by the Fair Debt Collection Practices Act. Should creditors persist after being informed of a bankruptcy filing, they risk fines and penalties. Once an attorney is involved, all communication must be directed to them.
In situations like foreclosure, where mortgage payments are overdue, utility shutoff notices might also become frequent. Filing for bankruptcy can prevent utility shutoffs. Chapter 7 bankruptcy can eliminate past due balances, while Chapter 13 allows payments through a court-approved plan.
Addressing Specific Debts
While student loans are generally not dischargeable in bankruptcy, alleviating other debts through Chapter 7 can free up resources to manage student loan obligations. For those eligible for Chapter 13, consolidating student loans into one manageable court-approved payment is a potential option.
Tackling Wage Garnishment
Wage garnishment is a sensitive issue that can expose one's financial difficulties to their employer. Some employers have strict policies regarding garnishments and may take action if thresholds are breached. Bankruptcy can immediately cease garnishment, despite previous court rulings on the matter.
Conclusion
Bankruptcy can serve as a powerful tool to halt collection actions or disputable claims. If the claimed debt amount is incorrect, filing for bankruptcy can eliminate these debts, regardless of their size. Understanding your rights and options with debt settlement companies and bankruptcy can help you regain financial stability.
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