Individuals Families and
Small Business Owners
Credit card debt is a leading cause of consumer financial distress. Collection agencies and credit card companies employ an aggressive approach to protect their interests. Many people find themselves caught in an endless cycle of credit card debt even as they try to make monthly payments. Bankruptcy protection may provide a solution, however it is important to create a long-term plan tailored to your particular circumstances. By consulting the DuPage County collections and credit lawyers at the Bankruptcy Center of Illinois, you are taking the first step to regaining financial stability.
Most credit card debt is unsecured. This means the credit card company does not maintain a security interest in any items purchased using the card. In other words, the company does not have a right to repossess items bought with the credit card. Certain businesses, such as furniture stores, warehouses, and electronics stores may have credit cards with debt that is secured by purchased items.
If you have fallen behind on credit card payments, the credit card company has the right to send your account to a debt collection agency. These agencies are required to comply with state law and the Fair Debt Collection Practices Act (FDCPA). The FDCPA is a federal law that prohibits the use of deception, unfair tactics, or abuse when attempting to collect debt. In Illinois, the Illinois Collection Agency Act governs.
A common violation of the FDCPA includes falsely representing the amount of debt. Debt collectors may try to recover an amount higher than the actual debt. Other tactics that are not allowed include calling at inappropriate times, threatening violence, or revealing the consumer’s debt to third parties.
Debt collectors do have the right to file a lawsuit against you. If you have received a Complaint and Summons, this means the collector has filed a lawsuit. Responding to a debt collection lawsuit is important in order to avoid a default judgment being entered against you.
One advantage of filing for Chapter 7 or Chapter 13 bankruptcy is that it triggers an automatic stay. This stay prevents debt collection agencies and creditors from activities such as harassing phone calls, wage garnishment, or lawsuits. Debtors usually feel a sense of relief by gaining the time to review their finances and set forth a plan for the future. It is possible for a creditor to request that the court lift the stay. In this situation, the creditor or debt collection agency could continue to collect.
There are particular circumstances in which a court may be more likely to lift a stay. A secured creditor that requests the court remove a stay may be successful if the debtor has not made any payments. If the collateral is inadequately protected, the stay may also be lifted.
A foreclosure sale is an example of a situation in which a court may lift a stay at the request of a mortgage holder. A skilled collections and credit attorney can help to assert a reason the motion to lift the stay should be denied. For example, if you could bring payments current, the court may deny the motion. The court may grant a motion to lift an automatic stay for unsecured debt if bankruptcy does not discharge the debt. This is the case with child support, for example.
At the Bankruptcy Center of Illinois, we will evaluate your credit card debt as well as other debt you may have accrued. Our goal is to help craft solutions to your debt problems and protect your interests. By retaining a skilled bankruptcy attorney, you are putting yourself in a strong position to tackle credit and collections debt. We help clients throughout DuPage County, including Aurora, Wheaton, and Naperville, as well as surrounding areas. To contact our office call (773) 993-0024 or complete our online form.