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Harassed by debt collectors? An automatic stay may help

Prosecutors in four California counties recently filed a lawsuit against debt collection firms IQor and Allied Interstate LLC for predatory tactics. The claims in the lawsuit are a snapshot of aggressive collection practices - repetitive calls for months on end, making calls before 8 a.m. and later than 9 p.m. and trying to collect debt discharged in bankruptcy.

In some of the cases no money was owed. And in one case highlighted by the San Diego Times, a couple spent three years trying to get Allied to stop calling their home. Despite certified letters and a call from a police officer, the company kept dialing the wrong number.

If you have fallen behind of bills, you may be on the receiving end of these aggressive debt collection strategies. Have you stopped answering your phone? Are you worried the calls will never cease? This post will explain how an automatic stay may provide relief.

What is an automatic stay?

If you have fallen behind on payments after a job loss, illness or injury, you have options. Bankruptcy is one of them; although it is not necessarily the first.

When you file for bankruptcy, a provision called the automatic stay goes into effect. As a result, creditors and collection agencies cannot contact you regarding money owed. For many individuals, this provision alone provides breathing room. Once the harassing phone calls and letters stop, many people find it becomes easier to deal with outstanding debt and get back on your feet.

Keeping the lights on

An automatic stay keeps the utilities from being turned off. It will pause an eviction or mortgage foreclosure action (although the landlord or mortgage lender may eventually prevail, this does buy you time), and any wage garnishments. It also halts student loan debt collectors.

If a creditor has already taken the step of filing a legal claim against you, the bankruptcy will put a halt to the lawsuit.

A bankruptcy attorney can help put in place a plan to get you back on your feet. Chapter 7 may be the best route depending on your total assets. In other cases, a Chapter 13 bankruptcy (wage-earner bankruptcy) allows the breathing room of a three to five year repayment plan. Either will discharge a certain amount of your debts and provide a fresh start.

At the Law Offices of Brian A. Barboza, we can explain your options after reviewing your financial situation, we will then help you decide if bankruptcy may provide needed relief and represent you in dealing with high pressure debt collectors. Take the first step to end the anxiety caused by constant ringing. Schedule a free consultation today.

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