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Bankruptcy and a debtor's rights against creditor harassment

Arizona residents on the receiving end of ceaseless phone calls from debt collectors and ignored requests to stop communicating may feel helpless. Struggling with both their debt and unfair debt collection process is overwhelming, and debtors may not be aware that they have rights against the debt collectors. Losing control of finances is understandable given the current economic climate, and Arizona residents have options at every turn. When struggling with repaying debt, they can complain about unfair debt collection and when they realize they are unable to repay everything, they can file for personal bankruptcy to wipe out most of their debts.

Chapter 7 and Chapter 13 bankruptcy are two forms of personal bankruptcy, and filers can choose the one that suits their income and circumstances. People with steady incomes but overwhelming bills may often select Chapter 13, as it allows them to repay their debt through a court supervised repayment plan based on their income.

In addition to filing for bankruptcy, when it comes to unfair collection practices, debtors have strong protections under the Fair Debt Collection Practices Act. However, this act only applies to third-party debt collectors, not to collectors directly attempting to collect their own debt.

Most importantly under the Act, collectors cannot repeatedly call debtors just to harass them. Though there is no limit on the number of calls collectors can make, if Arizona residents feel they are calling too often, they should start making a note of every time a call is received. In addition to this, collectors cannot threaten violence or dire consequences, such as a lawsuit or criminal prosecution or jail time.

Arizona residents may also not be aware that after a collector initially contacts them, the collector must send a written notice within five days, informing the debtor of the amount they owe, to whom it is owed and a statement on how to dispute the debt. Collectors cannot try to collect more than a debtor owes.

The Act also grants other rights to debtors, and Arizona residents should be aware of them to ensure they are not being taken advantage of. The law exists to protect them, whether they are repaying their debts or whether they are in the process of declaring bankruptcy, and being knowledgeable about their rights is very important.

Source: Yahoo "11 ways a debt collector may be breaking the law," Gerri Detweller, April 20, 2013