Chicago residents: be aware of illegal debt collection practices

Consumer bankruptcy gives people overburdened with debt a chance at a fresh start. But some collection agencies do not see it that way. Stories abound of debt collectors harassing people who do not owe that collector any money or who have completed bankruptcy and have had their former debts discharged. Those seeking debt relief should know that some debt collectors' methods are against the law.

Many Americans have resorted to using credit cards to weather the economic recession. In fact, last year saw a sharp increase in the amount of credit card debt taken on by consumers. There is so much debt to collect, however, that lenders have reached out to third-party collection agencies in unprecedented numbers. Twice as many consumers must deal with a third-party agency than they did approximately one decade ago.

It is important to remember that debt collectors are significantly constrained in what methods they can use to collect a debt. The Fair Debt Collection Act (FDCA) is a law that provides a number of safeguards. For example, some people complain about harassing phone calls at all hours of the night. Under the FDCA, collection agencies are only allowed to call between 8 a.m. and 9 p.m. In addition, it is illegal for them to make any threats to hurt you or take you into custody.

The government is taking additional measures to protect consumers. Earlier this year it closed a collection organization that used a foreign call center to generate harassing telephone calls. In addition, the Consumer Financial Protection Bureau could begin monitoring agencies that collect more than $10 million per year to ensure compliance with the law.

One woman harassed by a collection agency took matters into her own hands and hired a bankruptcy attorney, who made the telephone calls stop. Bankruptcy attorneys can also help people eliminate debt, meet financial challenges and achieve a fresh start through the bankruptcy process.

Source: Huffington Post, "Debt Collectors Targeted For Heightened Unlawful Harassment," Catherine New, Mar. 1, 2012.

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