The reason many Americans avoid filing bankruptcy is because of being afraid of debt collectors and what they tell them. On the other hand, the other reason why many Americans file for bankruptcy is because they're tired of being lied to and bullied by the debt collectors. I guess it's a perception thing. Some people are intimidated and allow the collection company to get under their skin, while others get fed up of being inundated by phone calls that berate them. It is true that filing bankruptcy is an emotional decision and it takes different trigger points to push different people over the edge to make the call to a bankruptcy attorney. Once a bankruptcy attorney has been called, most people only wish they made the decision sooner to get these unscrupulous characters off their backs.
Most people don't know that there are laws to protect consumers from the forms of collection that debt collectors are now using. If someone doesn't know, they will believe just about whatever they're told. If someone ever mentions filing bankruptcy, they will get an earful of what it will do to end their life as they know it. This would fall under a complete lie. There are some things that people need to understand about debt collectors.
First of all, they are not there to help you, so don't believe they are doing you a favor by working a full plan that you can afford. The bottom line is, they want your money. Most people don't know this but debt collectors get paid on a percentage of what they collect. If you give them nothing, they get nothing. Why do you think they will say anything they can to stop a person from filing for bankruptcy.
One thing to remember when speaking to a collection company, they probably bought that debt for pennies on the dollar. This gives a person a large amount of wiggle room to negotiate with them if you want to. Many people don't even realize that that debt that is being collected on might even be passed the statute of limitation, making the debt completely uncollectible. This is one thing that they will never share with you as they continue to harass a person over the phone.
The biggest lie these people tell is if you do not pay them, they can have you put in jail in the same fashion of someone who is failing to pay their child support or a court fine. The last time I checked, there is no longer any debtor's prison and this is one of the reasons why filing bankruptcy was created by Congress. Congress believed that good hard working Americans deserved a second chance and a fresh start. Initially, a person was able to file Chapter 7 bankruptcy every seven years, just as it was in the Bible. Now, after changes to the bankruptcy code back in 2005, someone filing Chapter 7 bankruptcy cannot re-file for eight years.
When collection companies start being a nuisance, the person should immediately call and make an appointment with a bankruptcy attorney to discuss their options. If bankruptcy filing is not in the cards, they might even find out the laws that debt collector is breaking to help them put a stop to the illegal debt collecting practices.
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