If you are knee-deep in debt and there seems to be no end to your financial woes, it might be time to get in touch with a consumer lawyer to get help. One of the primary reasons you should seek legal help is that the mounting debt negatively impacts your credit score.There are many consumer laws available to protect consumers in situations where a consumer is unable to pay debts and/or facing harassment by creditors and/or collection agencies.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) is a very powerful consumer law that protects consumers primarily from collection agencies. If you are constantly receiving phone calls from collection agencies, you or an attorney can send a “cease and desist letter” to the collection agency. At that point, the agency can only send you an acknowledgment of the letter and must cease all further contact (other than the filing of a lawsuit). If the collection agency still contacts you, you can seek up to $1000.00 in statutory damages plus attorneys’ fees. Finally, if you are receiving collection letters, the collection agency can be liable under some circumstances for failure to comply with the FDCPA.
If your credit report has adverse reporting from an original creditor, debt buyer and/or collection agency, there are a variety of laws available by which to challenge the adverse reporting and/or seek removal and/or damages.
Bankruptcy
As a final option to problems with debt, one can file a bankruptcy (typically a chapter 7) to seek a discharge primarily for unsecured credit card debt and medical bills. The filing of a bankruptcy also invokes the automatic stay, which is a legal force-field that prevents most types of collection activity while you are in bankruptcy. In addition, if you are a party to a lawsuit in another court, including an eviction proceeding or debt collection lawsuit, the bankruptcy should freeze the lawsuit and prevent the case from going forward in the pending court until the bankruptcy court says otherwise.
Finally, in addition to the discharge of certain types of debt, a bankruptcy is available as an option to stop a foreclosure, garnishment and other collection remedies. In fact, it is common for parties to file an emergency bankruptcy immediately prior to a foreclosure sale.
The Costs Involved
When you are already burdened with a debt, hiring a consumer lawyer can sink your finances even deeper. Establish the rate and all applicable charges before hiring a lawyer, so that you can plan accordingly. Some debt lawyers charge a flat fee, whereas others charge by the hour, depending on their experience and knowledge of debt settlement.
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