How To Deal With Creditors Before You File Bankruptcy

Posted by William Kain on December 24, 2016 at 9:45 PM
William Kain
Creditor Collection LettersOne of the most difficult aspects of a financial hardship can be the actions taken by creditors to collect their debts in spite of your inability to pay. Your income and assets can be brought into question and many of our clients come to us facing garnishment and liens on assets. It can be difficult to deal with the constant phone calls and collection notices but there are ways we can manage these complications and prevent them from hindering the goal of financial recovery. At Kain & Scott, our team of highly skilled MN Bankruptcy Lawyers can assist you with any concerns you may have regarding your creditors. Let’s begin by taking a look at some helpful information outlined for you so that you may steer clear of any avoidable complications with creditors throughout the bankruptcy process.

Why Do My creditors Want To Know Everything About Me?

Your creditors likely range from sympathetic to downright nasty. Debt collection has grown into an extremely lucrative industry and creditors are becoming increasingly mindful of providing themselves considerable protections and freedom when it comes to collecting on defaulted agreements. If your debt has been sent to a collection agency they are likely partnered with a law office which carries out the enforcement of their agreements. When you file bankruptcy your creditors must immediately cease all collection activities but this doesn’t take place until your paperwork is actually filed with the courts – simply retaining a lawyer to file a bankruptcy for you won’t stop collection.

Do I Have To Disclose Any Financial Information

There are many creditors and lenders out there rooting for you to fail from the beginning. These predatory lenders impose hidden fees and charges which you unknowingly agreed to. As soon as your account becomes past due their goal is to move your account through the collection process as rapidly as possible so that your income or assets may be used to clear your debt.

One should be very mindful of disclosing detailed financial information to a creditor while still being respectful and understanding that this is the job the agent was hired to carry out. Any information that is requested of you may be used against you to collect the debt in question. There is nothing wrong with simply informing your creditors that you are uncomfortable providing them with that type of information.

As a consumer you should be aware that failing to disclose your financial information or not accepting the payment plan which is being offered may lead to further collection activity; however, if your ultimate intention is to file bankruptcy this is of little concern.

Do I Have To Give My Creditors My Home Address And Personal Phone Number?

As tempting as it might be to not share your home address and phone number, you should be providing your creditors with accurate contact information so that you receive all correspondence from creditors. Every step of the legal collection process is time sensitive allowing consumers adequate time to address what is being asked of them. The worst that can happen to you if you provide your creditor with your home address and personal phone number is that they will serve a summons and complaint on you at your home. However, if they are going to serve you anyway, wouldn’t you rather have it happen at home rather than your place of employment or any another location the creditor has learned you frequent?

Besides, employment information can easily be mined from credit reports and all over the internet these days. Without accurate information, your creditors often see your place of employment as the next best and most reliable place to serve you. It’s in your best interest to provide creditors with a way to reach you at home by both mail and phone. Plus, at the very least, if you stay in communication with them and they don’t feel like you are trying to hide from them they are far less likely to try and serve you with legal papers before you get your case filed.

When Do I Tell My Creditors About My Bankruptcy?

You do not want to lie to your creditors but you do not need to disclose any information that makes you uncomfortable, either. As I discussed previously, it may be tempting to avoid your creditors entirely but this is not recommended. Avoiding responding to collection notices and phone calls only adds to the creditor’s concern and in turn accelerates the collection process. 

It is also not recommended you allude to the fact that you are filing bankruptcy before you have properly prepared to file. Creditors are extremely aware they can collect on debts until you’ve filed, so if you tell them you are going to file before you are ready to do so allows creditors to be even more aggressive in collection activities including wage garnishments or a bank liens.

However, don’t be alarmed. With the help of our team of kind, helpful and professional MN Bankruptcy Lawyers we can handle aggressive creditors and provide instruction regarding the actions being taken against you to avoid any negative consequences.

Contact us today with any concerns you have regarding the actions of your creditors so that we may immediately help resolve the matter. Your satisfaction and peace of mind is our top priority and we are ready to help you get your life back.

Give us a call today at one of our 8 professional and convenient locations and let us help you get on the road debt freedom today.

Topics: Debt Collection, Credit

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