Credit World

If you decide you should file for bankruptcy, stop making payments on your credit cards. This is one of the things I advise my clients to do when they hire me as their Orlando bankruptcy lawyer. Just the other day, before I could offer up this advice, a client inquired, “What will happen when if I don’t make credit card payments?”

The answer? Your credit card company will begin the collection process, which normally proceeds in this manner:

1. You will receive frequent phone calls from the original creditor, as will your family and your employer, attempting to convince you to make a payment over the phone. The collection agent will try to intimidate you, by saying they will ruin your financial life unless you pay up.

2. After 90 days or so, the account will be sold to a third party debt collector who will repeat the actions listed directly above.

3. Approximately 90 days later, (180 after you originally stopped making your payments), an collection attorney may be giving you a call to try and get you to pay on the debt and follow steps 1 and 2 listed above.

4. At this point, the attorney might file a lawsuit, seeking a judgment against you. A judgment would permit the creditor to collect from you through a wage garnishment. Your wages cannot be garnished without a judgment.

So, by my estimation, it has been at least 6 months since the last payment was made. Takes a bit of time for a judgment to be obtained. Then, how come, when a client hires me as their bankruptcy lawyer, do I tell them they should stop making their credit card payments?

Because the idea is for my client to be filing bankruptcy sometime well before the judgment is entered. Garnishment is taken out of the equation. This way, my client uses the payments they would have made to an abusive debt collector, for a credit card debt, to catch up on a car payment or a house payment they want to keep through filing bankruptcy, or to start building that safety net their Orlando bankruptcy lawyer advocates creating as part of your fresh start strategy when filing bankruptcy.

As for those rude and abusive debt collectors, why not sue them? You see, here in Florida, we have some of the toughest laws in the country to protect consumers. These laws are intended to protect you from the abuse described above, which debt collectors use on a regular basis to coerce you into paying your debt. Aside from the Florida laws, there is also a Federal Law which prohibits third party debt collectors from those same abusive acts. To enforce your rights, you can sue your creditors.

Collection agents and the whole debt collection process can be an intimidating one. Don’t let it be! As long as you know your rights and how the system works, the empty threats thrown at you on a call from a debt collector will seem as foolish and absurd as they really are; and in most cases actionable in court.

To learn more about how an experienced bankruptcy lawyer can guide you through the collection process and assist you in getting a fresh start financially, try my Free eCourse.

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