When you’re overburdened with excessive debt, it’s not unusual to get relentlessly bombarded with a never-ending barrage of phone calls from money hungry creditors. There goal and paycheck usually are dependent on them trying to get whatever they can from you. It is as if your phone has been hijacked, you are stressed out enough over your finances and you just want some peace and quiet- you just want the phone to stop ringing.
Unfortunately, telling your creditors that you are planning to file for bankruptcy won’t quite be enough to stop their pursuit for your money. Until you file bankruptcy and have a case number they can continue to call. However, depending on what you are trying to accomplish there may be a better approach.
What Do You Wish to Accomplish?
Usually, when you inform a creditor that it is your intention to file for bankruptcy, it is for the purpose that they believe you have no money and that it isn’t worth pursuing you. But as creditors know, that isn’t always the case. Sometimes the debtors use bankruptcy as a bargaining tactic to negotiate a lower debt settlement figure. Your true motives and situation will help guide you to know whether it makes sense to mention bankruptcy or not.
You Just Want the Phone Calls to Stop
There is no guarantee that a threat of filing bankruptcy will stop the near harassing phone calls from your creditors. The only “Guarantee” is to actually file for bankruptcy and get a court order called an “Automatic Stay”. The automatic stay, once in effect legally prohibits your creditors from making any attempt to contact you to collect a debt.
Creditors know all about the power of the automatic stay and if you just threaten bankruptcy it may increase their efforts to collect the debt before it’s too late. You may, in fact, increase the rate of phone calls.
That doesn’t mean that you are out of options though. Some other approaches are:
- Hiring an attorney. If you hire a bankruptcy attorney, and you inform your creditor of that fact, the creditor will have to call your attorney’s office instead of you at home. Some bankruptcy attorneys will accept a small down payment—perhaps as little as $100—as an initial retainer so that you can avoid the calls while saving the rest of your attorneys’ fees needed to file bankruptcy.
- Ask the creditor to stop. Additionally, you can write to the creditor and ask it to stop calling you. Keep in mind, however, that you might want to know what’s going on with your account. Unless you’re judgment proof (you don’t have any assets the creditor can get), you might want to consider another alternative.
When You Want to Negotiate Your Debt
Ideally, no one wants to file for bankruptcy. Therefore, it’s not too uncommon to attempt to negotiate a settlement that you can afford to pay. The problem with this approach is that it’s not very feasible unless you reach agreements with all of your creditors, before committing yourself to any one arrangement.
One approach is to tell your creditors you’d like to try to avoid filing bankruptcy. This approach can be effective if all your creditors agree to a lesser amount.
However, creditors hear this so often and many are very skeptical of your true intentions. Many will ask for proof of financial hardship by requesting certain financial documentation. Documentation that you may ultimately regret turning over should things turn from bad to worse.
If you only reach agreements with some of your creditors, you may still have to eventually file bankruptcy after paying down some of your debt. Do not pay out funds if you are going to still have to file bankruptcy in the end.
Sometimes It’s Best to Just File Bankruptcy and Say Nothing to the Creditors
Your problem will be solved once your bankruptcy case is filed. Until then, you’ll want to avoid giving your creditors any information they can later use against you. If you don’t have the money to pay –and you realize you will be filing bankruptcy soon, your best bet might be to say nothing to your creditors. Or better yet, simply do not answer the phone.
If you need help with out of control debt and the constant creditor harassing phone calls, bankruptcy may be the solution. Call PIKUNIS LAW at (856) 282-5505 to see if bankruptcy is right for you.