.There are two very important statutes that serve to protect consumers from some of the consequences of too much debt.
The first is the United States Bankruptcy Code. The other statute is the Fair Debt Collections Practices Act or FDCPA.
Both statutes individually can help consumers.
When you combine the two that is when some really good things can happen.
United States Bankruptcy Code
First, the Bankruptcy Code allows for the discharge of certain types of debt.
If you find yourself struggling with credit card debts or other types of debts, a bankruptcy filing may be appropriate.
Depending on your situation a bankruptcy filing can help:
- improve your personal finances
- reducing the amount that you pay on certain secured debts.
Fair Debt Collections Practices Act
The second statute is the Fair Debt Collections Practices Act or FDCPA.
They regulate how debt collectors can collect any debts.
The FDCPA prohibits a debt collector from making false or misleading statements in any attempt to collect a debt.
The FDCPA further prohibits any harassment or abuse such as:
- using obscene for profane language
- telephone to ring repeatedly with the intent to annoy, abuse, or harass
There are also requirements that a debt collector must meet and provide information to the consumer about the debt.
Violations of the FDCPA can result in the consumer being awarded actual damages and statutory damages.
Consumers who are contemplating bankruptcy are being subjected to numerous collection calls and other collection attempts prior to actually filing bankruptcy.
These collection attempts may violate the FDCPA for which the consumer can sue the creditor and recover their actual damages and statutory damages.
While a violation of the FDCPA does not mean that the underlying debt is extinguished.
You can use the Bankruptcy Code as a shield to protect yourself from the consequences of the debt while using the FDCPA.
You should be sure that your attorney is experienced in both
If you file an FDCPA case while you are in your bankruptcy case, make sure that your bankruptcy attorney has “exempted” the FDCPA claim if you want to recover damages
Otherwise, the trustee assigned to your bankruptcy case may try to recover those damages as a pre-petition asset of the bankruptcy estate.
If you follow these steps and appropriately document any potential debt collection abuses, you can literally have certain creditors “pay” for your bankruptcy case.
You will recover money from your creditors to possibly pay or recoup the legal fees paid to your bankruptcy attorney. *
*Excerpts taken from www.bankruptcylawnetwork.com submission by Adrian Lapas, Esq., entitled “Bankruptcy and the FDCPA.”