If you are contemplating filing for bankruptcy and have already been contacted by a creditor because you are past due on payments that you owe associated with the debt, you need to be prepared to consult with an experienced attorney immediately.
Only a lawyer can advise you about whether or not bankruptcy is in your best interests and the right bankruptcy attorney can help you avoid many pitfalls, if you’ve already had been contacted by creditors. You do have rights when dealing with debt collectors and there are certain actions that they cannot carry out or statements they cannot make. It is against the law, for example, for a debt collector to make false statements to you or to harass you.
However, the debt collector may still use other legal avenues to collect the debt when you are avoiding them or ignoring them. If you have private student loans and they are in default, you need to remember that a debt collector looking to recover on a private student loan does not collect on behalf of, represent, or work for any branch of the federal government.
A debt collector trying to obtain payments on a private student loan cannot intercept your state or federal tax refund, garnish your wages without a court order, garnish your social security disability payments or prevent you from getting federal student aid to go back to school in the future.
However, if you have a significant federal student loan debt, is important to realize that these are very rarely, if ever, discharged in the bankruptcy process. Private student loans and other types of debt, however, could be subjected to discharge in the bankruptcy process but you should always share your concerns and questions directly with an experienced attorney to verify that.
Harassment is illegal, but it’s up to you to do everything in your power to fight back if you have been harmed by a debt collector.