How to put a stop to creditor harassment

The foreclosure crisis and the economic downtown publicly revealed what many Indianapolis residents have known for a long time - banks do not prioritize the best interests of consumers. In fact, banks sometimes engage in unscrupulous debt collection practices that infringe on the rights of consumers. Although regulators have tried to crack down on such efforts in recent years, many consumers are still dealing with abusive creditors.

One way to put a stop to creditor harassment is to file bankruptcy, or inquire about bankruptcy and debt relief options with a bankruptcy attorney. Under the Fair Debt Collection Practices Act, collection agencies may not contact consumers that are being represented by lawyers in regard to their debts.

When consumers do file bankruptcy, many debts are discharged and this should also end creditor harassment. Creditors may not legally solicit the payment of debts that have been discharged.

In some case, however, creditors cross legal boundaries and go after discharged debts. When that happens, debtors should contact their attorneys.

The Wall Street Journal recently reported that Bank of America Corp. has been ordered by a judge to pay $10,000 for each month it contacts a couple whose home loan was discharged in Chapter 7 bankruptcy.

The couple was relieved of the $227,000 loan when they received bankruptcy protection, but Bank of America has continued efforts to collect by barraging them with letters and phone calls, according to the report.

This case is a reminder that although creditors do not always play by the rules, consumers have rights. When those rights are violated, it is important that creditors are held accountable.

Source: Wall Street Journal, "Bankruptcy Judge Sends a Message to Bank of America," Peg Brickley, Oct. 4, 2013