When you owe money to a creditor, they will try just about anything to get that money off of you. You could very easily compare creditor’s collection actions to trying to get water from a stone, but they will never stop harassing you until one of two things happens; you pay the debt or you receive a bankruptcy discharge.
How Do Creditors Collect Debts?
If you are unable to pay your debts, creditors will stoop to the lowest levels in order to collect from you. Even if it means putting you in a terrible position, and leaving you without means to live a reasonable life, creditors will use a variety of collection tactics, including:
- Wage garnishment
- Tax refund Intercepts
To collect on some debts, creditors may be able to start garnishing your wages. Creditors can take up to 25 percent of your income, or 30 times the federal minimum wage, whichever amount is lower. Many creditors will require a judgement against you to garnish wages, but some debts, such as income taxes and student loans, do not require creditors to get a court judgment.
If your property is listed as collateral on a defaulted loan, it could be repossessed. For example, if you fall behind on a car loan, the car could be taken by the bank that issued the loan, and auctioned off to pay some or all of the remainder of your loan.
Similarly, if you default on your mortgage, the bank may foreclose your house. Foreclosure leaves countless families without a home, but banks are not typically sympathetic. The house will be sold to cover the unpaid debt.
Creditors may also be able to intercept any tax refunds you’ve got coming your way, and will continue to harass you daily via phone calls, emails, and letters. They will be relentless and without compassion in their pursuit of you.
How to Make It All Stop
For many, the best solution to harassment and collection actions is to file for Chapter 7 bankruptcy. An automatic stay will put a halt to any wage garnishment, repossession, and foreclosures, and give you time to save your property and discharge your debt.
The Monmouth County bankruptcy lawyers at Garland & Mason, LLC have years of experience helping people with financial struggles achieve their goals of becoming debt free.