Dealing with Debt Collections: When to Turn to Bankruptcy

There comes a point when you've had enough with the endless collection calls. The rude tactics that debt collection agencies use to get money can make a person feel like they're a criminal. A time will come when enough is enough. But at what point do you turn to bankruptcy for relief?

When Enough is Enough

Collection agencies are somewhat muzzled by law in terms of how much pressure they can apply. No phone calls before 8am and after 9pm. They cannot call you at work, they can only third parties once, and they cannot lie to you.  Unfortunately, they will harass a debtor as much as they can under the limitations imposed by the Fair Trade and Credit Act. And there are those debt collection agencies who will blatantly ignore the law in their attempts.

There are ways around the collector, but you need to have money to make good on it. This includes going back to the original creditor and offering to settle the debt. In the event that the debt was sold, the offer will have to be made to the collector. Maybe consider taking out a consolidation loan and have all of the debts into one lump sum payment. All this requires having the ability to pay, which may be what caused the loans to go unpaid in the first place. The next step is to consider bankruptcy.

Moving Forward Through Bankruptcy

If you're at a point where you're unable to pay your bills, regardless of why, it's a good time to think about bankruptcy. Don't even concern yourself with your credit rating at this point. It's shot once the bills are paid late or not at all. Look at filing as a way to leave the creditors behind and start over with your financial life. It's a satisfying feeling knowing that you'll never have to talk to a debt collection agency ever again.

A successful bankruptcy discharge means that the old debts are gone, never to come back again. And if the debt collection agency decides to ignore the law, you can take them to court and win damages, even if there is no actual proof of. Now you can start out with a fresh budget, hopefully some extra money each month, and start working on rebuilding your credit and your life.

Seeking Legal Help

It's tough going at it alone with situations like these. At the very least, talk to an attorney who's experienced with dealing with bankruptcy. Their knowledge will protect you from collectors as well as helping you making the best decision for your fiscal future.