IF you are delinquent in your debt obligations and are being pursued by bill collectors, you may be wondering what these bill collectors can do to force you to pay. Maybe you’re afraid to even answer your phone or open your mailbox, fearing what you may find. Perhaps you’re sick and tired of bill collectors calling you day and night, threatening to take what little you have.
Like most people in this situation, maybe you’re also embarrassed to talk to people about your problem and the thought of seeing an attorney to take legal action scares the living daylights out of you. In this article, I would like to discuss the “arsenal of weapons” that creditors usually have at their disposal in going after someone who is not paying his or her bills. Armed with the knowledge of what creditors can do, perhaps you can find a way to level the playing field and protect yourself before things get really ugly.
Collection/Harassment: Before the delinquent account is turned over to an attorney for legal action, it is usually first given to the creditor’s collection department or an outside collection agency. The bill collector is the “hired gun” who starts calling the debtor at home and/or at work. While there are laws that regulate collection activity, bill collector abuse is quite rampant. The job of the bill collector is to make your life miserable. The idea is that if they can put enough pressure on you to do whatever it takes to produce money to pay them, they will continue the harassment until they see some results.
Lawsuit: Depending on the amount owed, it may or may not make sense for the creditor to sue you for the amount owed. When the amount is less than $5,000, usually the creditor can take you to small claims court. The hearings in small claims court are informal and no attorneys are present. Regardless of which court the lawsuit is filed in, you are entitled to be notified of the proceeding against you. Thus, you are first served a notice called “summons” and this document tells you how much time you have to respond or file an answer to the lawsuit.
Since most people know nothing about the law and the court system, they would need an attorney at this point to represent them in the lawsuit. Failure to respond to the lawsuit (usually 30 days as stated on the face of the summons) will result in something called a “default judgment.” A “default judgment” is a judgment won by the plaintiff, not based on the merits of the case, but simply based on your failure to respond. Thus, if you get sued for a certain amount of money and you don’t respond to the lawsuit within the time allotted, your failure to respond is considered a waiver of your right to contest the lawsuit.
Judgment nforcement: Once the creditor obtains a judgment against you (by default or otherwise), the creditor will now look for ways to enforce the judgment and collect on the debt. If you are working, the creditor may obtain a wage garnishment order and have your employer take money out of your paycheck to pay what you owe. If you have bank or other financial accounts, the creditor may levy on these accounts (have your accounts frozen so creditor may collect).
If you own real property, the creditor usually files what is called an “Abstract of Judgment” with the County Recorders Office where your real property is located. This creates a lien on your real property and makes the creditor a secured creditor. Liens on your property would have to be paid off in full if you ever decide to sell your property in the future. Furthermore, liens are not automatically removed by filing for Bankruptcy. In certain cases, however, a Bankruptcy attorney may remove such liens using lien avoidance techniques available under Bankruptcy law.
If you are being pursued by creditors because of delinquent debt obligations or if your situation is headed in that direction, don’t wait until the last minute to protect what you have. Remember that the longer you wait and ignore your debt problems, the worse your situation will get. Debt problems cannot be ignored and will blow up in your face someday; it’s just a matter of time.
I am often told by people who consult our office regarding bankruptcy that they are tired of rude, obnoxious bill collectors who call them almost all day long at home and at work. I am told that these bill collectors are often condescending in their attitude and most people are often afraid of even talking to them.
Please be aware that there are federal and state laws that control what bill collectors can and cannot do while trying to collect a debt. In spite of these laws, however, a lot of these bill collectors who break the law often get away with it because people are so afraid of them and so embarrassed about their situation that very few take action to enforce their rights under the debt collection laws.
Filing for bankruptcy automatically stops creditor harassment and abuse. The Bankruptcy Code states that upon filing of a petition, all collection efforts must stop. A creditor who willfully violates federal law can be sued in court and be ordered to pay damages.
Being in debt does not make you a “bad” person unless you intentionally defrauded your creditors for selfish gain. Do not ever, ever let a bill collector make you feel that you have committed a crime just because you cannot pay your debts. Whatever the reasons are for being where you are, do not let anyone judge you. Find a knowledgeable and experienced attorney who will take time to understand your situation and help you find a way out of your problems.
If you are experiencing debt problems and don’t know what your options are, we would like to help. To schedule a free confidential consultation, please call Toll-Free 1-866-477-7772. We have offices located in Glendale, Cerritos and Valencia.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772.